Practice Analysis Final Report 2023

Maintaining the
Relevance of the Uniform

CPA Examination – ®
Aligning the Exam with the

CPA Evolution Licensure Model:
Practice Analysis Final Report
Approved by the Board of Examiners

American Institute of CPAs
Dec. 1, 2022
i
Contents
2 Executive Summary
4 Final Exam Design

4 Uniform CPA Examination Blueprints
4 Launch Date
4 Exam Design
5 Key Tentative Dates

5 2024 CPA Exam Transition Policy
5 Fall 2023 Transition Timeline — Tentative
6 2024 Test Administration Schedule/Score Release Timeline — Tentative
6 Credit Extension
7 Exposure Draft Comment Responses

7 Section Comments
13 General Comments
17 Other Exam Comments
A1 Appendix
A1 A. Uniform CPA Examination® Blueprints
B1 B. Board of Examiners
C1 C. Exposure Draft Respondents
Maintaining the Relevance of the Uniform CPA Examination® – 1

Aligning the Exam with the CPA Evolution Licensure Model: Practice Analysis Final Report
Executive Summary
The Uniform CPA Examination (CPA Exam) aligned the Discipline passed; professional standards provide
with the CPA Evolution Licensure Model (the 2024 CPA guidance related to required competence and due care
Exam) will launch in January 2024. This Final Report when performing professional services.
includes the final CPA Exam Blueprints (the Blueprints).
These Blueprints reflect the culmination of the Practice The CPA Exam provides reasonable assurance to Boards
Analysis research. of Accountancy that individuals who pass the CPA
Exam possess the minimum level of knowledge and
The CPA Evolution initiative is transforming the Certified skills necessary for initial licensure as a CPA. To remain
Public Accountant (CPA) licensure model to recognize the relevant to a dynamic profession and current with the
rapidly changing skills and competencies the practice of real-world demands on nlCPAs, the CPA Exam must
accounting requires today and will require in the future. continually evolve.
It is a joint effort of the National Association of State
Boards of Accountancy (NASBA) and the American In mid-2020, the AICPA’s Board of Examiners (BOE)
Institute of Certified Public Accountants (AICPA). launched a Practice Analysis (PA)2, a research project
designed to update its understanding of the knowledge
Exponential growth in new rules, concepts, and standards, and skills required of nlCPAs, particularly focused on
along with changes in the roles and responsibilities of aligning the CPA Exam to CPA Evolution.
newly licensed CPAs (nlCPAs), have caused the body of
knowledge required of nlCPAs to grow. The CPA Evolution The periodic execution of a PA is necessary to ensure
Licensure Model (CPA Evolution) establishes a foundation that the CPA Exam:
for the most important and relevant topics that all nlCPAs • Supports the profession’s commitment to protecting
need to know to protect the public interest while providing the public interest;
an opportunity for candidates to choose one of three
• Remains current, relevant, reliable, psychometrically
Disciplines as described below.
valid, and legally defensible; and
Under CPA Evolution, all candidates will be required to
• Fulfills the needs of the Boards of Accountancy in
pass three Core Exam sections covering: Auditing and
carrying out their licensing responsibilities.
Attestation (AUD); Financial Accounting and Reporting
(FAR); and Taxation and Regulation (REG). The AICPA collected input from a wide range of
stakeholders who share an interest in preserving the
Each candidate will also choose one Discipline section1
strength and mission of the profession. Information
(i.e., Business Analysis and Reporting (BAR), Information
was gathered using a variety of methods, including
Systems and Controls (ISC), or Tax Compliance and
surveys, focus groups, interviews, and a confirmation
Planning (TCP)) to demonstrate knowledge and skills
survey. Valuable input was collected from individual
in that particular domain. The Disciplines will focus
CPAs, Boards of Accountancy, public accounting firms,
on topics that apply to nlCPAs engaged in those areas
individuals working in business and industry, government,
of practice and are less likely to be encountered by
and academia. Additionally, the BOE and its Practice
nlCPAs who are not focused in those areas of practice.
Analysis Sponsor Group, Content Committee and its
Regardless of a candidate’s chosen Discipline, CPA
Content Subcommittees contributed countless hours
Evolution leads to CPA licensure, with rights, privileges,
to the effort, offering professional insight and guidance
and responsibilities consistent with the present CPA
throughout the PA.
license. CPA professional practice is not limited by
1
assing one Discipline Exam section is required for licensure. Once a candidate passes a Discipline Exam section, they cannot take another Discipline Exam section. If a candidate
P
takes a Discipline Exam section and does not pass, or loses credit for a passed Discipline Exam section, they can choose to take any of the Discipline Exam sections.
2
An overview of the PA methodology was described in Appendix B of the Exposure Draft.

After concluding its research, the AICPA published an Focus on Data and Technology Concepts
Exposure Draft (ED), Maintaining the Relevance of the
• Data and technology concepts and higher order
Uniform CPA Examination® — Aligning the Exam with
skills will be tested in all Core and Discipline
the CPA Evolution Licensure Model, which presented
Exam sections.
the findings and conclusions of the PA. The proposed
ED represented the results of in-depth research, critical New content is primarily in the ISC and TCP
analysis of data, best practices in test development, Discipline Exam sections as follows:
and the collective thinking of leaders in the profession.
• IT infrastructure, platforms, and services;
In response to the ED, the AICPA received 43 comment
security, confidentiality, and privacy, and
letters that included over 300 discrete comments
considerations for System and Organization
for consideration.
Controls (SOC) engagements will be assessed
Respondents supported proposed changes related to in the ISC Discipline Exam section.
the key themes outlined in the ED including:
• Personal financial planning and tax planning will
be assessed in the TCP Discipline Exam section.
Allocation of Core and Discipline Content
• The creation of three Core Exam sections and three The BOE’s Content Committee and Content
Discipline Exam sections required realignment Subcommittees reviewed, considered, and deliberated
of some existing CPA Exam content and the the comments received and proposed multiple changes
identification of new content to be assessed on the to the ED Blueprints to address nlCPA practice and to
2024 CPA Exam. Substantially all of the content provide clarity to what will be assessed on the CPA
previously assessed in the Business Environment Exam. The Blueprints were approved by the BOE on
and Concepts (BEC) section has been reallocated to Dec. 1, 2022, and are included in Appendix A to this
the AUD, FAR, BAR and ISC Exam sections. Final Report. For further discussion of the more
significant revisions to the ED Blueprints, see the
Exposure Draft Comment Responses section below.

Final Exam Design
Uniform CPA Examination Blueprints Launch Date
The CPA Exam Blueprints are the official document The CPA Exam will launch in the testing window
3
approved by the BOE defining the content knowledge starting in January 2024.
and skills required of nlCPAs for protection of the public
interest and eligible for assessment on the CPA Exam.
Exam Design
The CPA Exam Blueprints documenting the Core and
Discipline Exam sections content knowledge and skills The table below presents the final design of the CPA
eligible for assessment beginning in January 2024, are Exam by Core and Discipline section, section time,
included as Appendix A to this Final Report. and question type.
Section Section time Multiple-choice Tasked-based

questions (MCQs) simulations (TBSs)
AUD – Core 4 hours 78 7
FAR – Core 4 hours 50 7
REG – Core 4 hours 72 8
BAR – Discipline 4 hours 50 7
ISC – Discipline 4 hours 82 6
TCP – Discipline 4 hours 68 7
The table below presents the scoring weight of MCQs and TBSs for each Core and Discipline Exam section.
Score weighting
Section Multiple-choice questions (MCQs) Tasked-based simulations (TBSs)
AUD – Core 50% 50%
FAR – Core 50% 50%
REG – Core 50% 50%
BAR – Discipline 50% 50%
ISC – Discipline 60% 40%
TCP – Discipline 50% 50%
3
The testing window is currently anticipated to open on Jan. 10, 2024.

Key Tentative Dates
2024 CPA Exam Transition Policy Fall 2023 Transition Timeline — Tentative
It is important to be aware that there will be a hard Candidates should note that the last day of testing for all
cutover from the current CPA Exam sections to the 2024 current CPA Exam sections (AUD, BEC, FAR, and REG) is
CPA Exam sections on the January 2024 launch. None Dec. 15, 2023. No CPA Exam sections may be scheduled
of the sections of the current CPA Exam will be available for testing from Dec. 16, 2023, through Jan. 9, 2024, to
for testing after December 15, 2023. Accordingly, it is allow for conversion of IT systems to the 2024 CPA Exam
necessary to have a transition policy for mapping credit sections. Candidates are encouraged to plan their testing
for CPA Exam sections passed under the current CPA schedules accordingly.
Exam to credit under the 2024 CPA Exam. Transition
policies like this have been necessary at other times In addition, candidates wishing to take BEC in the latter
when significant changes were made to the CPA Exam, part of 2023 need to know that the NASBA Gateway
such as when it was computerized in April 2004. system will stop processing Authorizations to Test and
Notices to Schedule for BEC on Nov. 15, 2023. This will
The CPA Exam transition policy was recommended necessitate that Boards of Accountancy establish final
to the Boards of Accountancy by the NASBA CBT application deadlines (first-time and re-exam) for BEC
Administration Committee after development and sections. These deadlines are yet to be determined and
much deliberation by a task force with state board will be published on NASBA’s website once they become
representatives from the BOE, sitting state board available, and shared by each Board of Accountancy.
members, and executive directors from multiple states.
The Boards of Accountancy have agreed this transition Conversely, Boards of Accountancy will need to establish
policy best serves the candidates, the state boards, initial application acceptance dates for Discipline
and the public interest. sections: BAR, ISC, and TCP. These initial acceptance
dates are also yet to be determined and will be published
The transition policy is quite simple. Candidates who on NASBA’s website once they become available, and
have credit for AUD, FAR, or REG on the current CPA shared by each Board of Accountancy. Authorizations
Exam will not need to take the corresponding Core to Test and Notices to Schedule for BAR, ISC, and TCP
section of AUD, FAR, or REG on the 2024 CPA Exam. will not be processed by NASBA’s Gateway system until
Candidates who have credit for BEC on the current Nov. 22, 2023.
CPA Exam will not need to take any of the three
Discipline sections. AUD, FAR, and REG applications can be continually
submitted and processed, however the scheduling
If, however, a candidate loses credit for AUD, FAR, blackouts do apply. NASBA has published further
or REG after Dec. 31, 2023, they then must take the information on its website regarding Key Tentative Dates.
corresponding new Core section of AUD, FAR, or
REG. A candidate who loses credit for BEC after
Dec. 31, 2023, must select one of the three Discipline
sections to be tested. See Transition Policy Announced
for the 2024 CPA Exam Under the CPA Evolution
initiative on NASBA’s website.

2024 Test Administration Schedule/Score Release Timeline — Tentative
The tentative 2024 CPA Exam testing schedule and score release schedule is presented below. Please note that these
dates are tentative pending further review.
2024 Test Administration Schedule/Score Release Timeline*
Quarter Core Test Dates Core Score Reports Discipline Test Dates Discipline Score Reports
24Q1 Jan. 10–March 26 May 14–June 4 Jan. 10–Feb. 6 March 28–April 16
24Q2 April 1–June 25 Aug. 1 April 20–May 19 June 20
24Q3 July1–Sept. 25 Nov. 1 July 1–31 Sept. 3
24Q4 Oct. 1–Dec. 26 Early February 2025 Oct. 1–31 Dec. 3
* All dates are subject to change.
It is anticipated that testing will commence on Credit Extension

Jan. 10, 2024, for all sections. While the Core sections
(AUD, FAR, and REG) will be available for testing Due to the limited testing schedule and delayed score
through March 26, 2024, in the first quarter of 2024, the releases in 2024, the CBT Administration and Executive
Discipline sections (BAR, ISC, and TCP) will be available Directors Committees of NASBA have recommended
for testing through Feb. 6, 2024. Scores are anticipated a policy to Boards of Accountancy for consideration,
to only be released once per test section per quarter due which would allow candidates with Uniform CPA
to necessary standard-setting analyses and activities. Examination credit(s) on Jan. 1, 2024, to have such
Core and Discipline scores should be available before credit(s) extended to June 30, 2025.
the end of the 24Q2 respective test dates to allow
Each Board of Accountancy must individually consider
candidates who did not pass in 24Q1 to apply and retest
if it wishes to adopt such a policy. To date, a significant
in the immediately following testing window. NASBA
number of jurisdictions have already approved the policy.
has published further information on their website
Others will be reviewing it at upcoming board meetings.
regarding Key Tentative Dates.
In some states, a board may be favorably inclined to
adopt the policy, but legislative rulemaking may be
required, which could take some time. NASBA has
published a map on its website, which will be updated
as boards consider the policy.

Exposure Draft Comment Responses
In July 2022, the AICPA published the Exposure Respondent Comments
Draft, Maintaining the Relevance of the Uniform Respondent comments are identified and addressed
CPA Examination® – Aligning the Exam with the CPA below in three categories:
Evolution Licensure Model. The proposal presented the
• Section comments
results of in-depth research, critical analysis of data,
best practices in test development, and the collective • General comments
thinking of leaders in the profession. In response to • Other Exam comments
the ED, the AICPA received 43 comment letters from
NASBA, State Boards of Accountancy, State CPA
Societies, firms, organizations, and individuals from Section Comments
across the profession. In aggregate, the comment
The more significant revisions to the Blueprints arising
letters represented more than 300 discrete comments
from comments received are highlighted below by
for consideration.
Exam section.
A significant majority of respondents to the ED
Updates to Section Introductions, Summary
supported the proposed changes to the Exam,
Blueprints, and References
particularly the allocation of content into the
respective Core and Discipline Exam sections and the Based upon multiple comments about (i) the
assessment of data and technology concepts in all relationship between the number of tasks and the extent
Exam sections. However, there were also comments, to which related content topics are covered and (ii) the
questions, and concerns that grouped around certain references listed for each section, revisions were made
themes presented more fully below. to provide greater clarity. A statement about the number
of tasks not being indicative of the extent of assessment
Each of the Exam section Content Subcommittees related to the content Group, Topic or skill was revised
reviewed and considered the comments related to and relocated from each section’s Introduction to
their respective Exam section Blueprints. The Content each section’s Summary Blueprint page for greater
Subcommittees considered the comments and prominence. Additionally, an introductory paragraph
modified representative tasks, added representative to the References was added to each Exam section.
tasks, or alternatively, determined change was See the following example: “The References detailed
not necessary. Content Subcommittees often below are the sources of the subject matter eligible for
concluded change was not necessary as they assessment in the AUD section, to the extent that the
believed they had considered views expressed by subject matter is included in the Blueprint’s content
commenters in their original deliberations on the Areas, Groups and Topics. Further, the assessment
Blueprints, and after re-deliberation, concluded of the subject matter described in a representative
that the original Blueprint was appropriate. In some task that identifies an organization, publication, law,
instances, Content Subcommittees concluded that regulation, standard or framework is limited to the
the suggested revision did not meet the target level specific sections of the References detailed below.
of nlCPA practice for protecting the public interest. Similarly, subject matter identified in a representative
The Content Subcommittee’s re-deliberation process task and related subject matter is eligible for
and conclusions were reviewed with the Content assessment to the extent it is included in the References
Committee and the BOE, each of which unanimously detailed below.” Additionally, when appropriate, specific
approved the Blueprints (Appendix A). references were narrowed to better identify relevant
sections eligible for assessment. For example, the
references listed in AUD were revised by changing
the reference “Sarbanes-Oxley Act of 2002”
to a more specific reference, more closely aligned
to what is being assessed “Title III and Title IV of
the Sarbanes-Oxley Act of 2002.”

AUD
Employee Retirement Income Security Act Quality Control
of 1974 (ERISA)
The Topic name in AUD Area I, Group G — Quality
A commenter noted there was only one specific control was renamed to “Audit and assurance quality.”
reference to audits of financial statements of employee The underlying tasks were also revised to acknowledge
benefit plans in AUD, which was included as an upcoming changes to standards from both the AICPA
example in the types of audit engagements assessed and the Public Company Accounting Oversight Board
in AUD Area I, Group C, Topic 1 – Nature and scope (PCAOB) while still being relevant to the nlCPA’s quality
of audit engagements. There was no intention to limit control practices of today. The scope of content tested
audits of ERISA plan financial statements to this single is unchanged from the ED.
Topic. Given the relevance of ERISA plan financial
statement audits to nlCPA practice and to clarify their Sampling techniques
coverage within AUD, the scope of testing of audits
A new application task was added in AUD Area III, Group
of ERISA plan financial statements is now included in
C — Sampling techniques: “Determine the appropriate
the AUD Section Introduction. This is a clarification of
sampling method to be used in order to accomplish the
the assessment of ERISA plan engagements and the
objective (control, attribute, test of detail) of the planned
scope of content tested is unchanged from the ED.
procedures.” This task is an expansion of the scope of
content tested from the ED.
Communication with Predecessor Auditors
AUD Area I, Group D, Topic 2 — Terms of engagement Sufficient appropriate evidence
and the engagement letter task “Identify the
A new analysis task was added to AUD Area III, Group D,
factors affecting the acceptance or continuance
Topic 1 — Test of controls and test of details: “Perform
of an engagement” was revised to add “including
tests of details, including the analysis of exceptions, to
communications with predecessor auditors.” This is a
identify potential misstatements in an audit of financial
clarification of the tasks in the Topic and the scope of
statements.” Previously, the Topic only included an
content tested is unchanged from the ED.
analysis task focused on tests of controls despite the
Topic’s title. This is a clarification of the tasks in the
Topic and the scope of content tested is unchanged
from the ED.
FAR
Direct method Nongovernmental not-for-profit entities
An application task was revised in FAR Area I, Group An application task statement was revised in FAR
A, Topic 5 — Statement of cash flows removing the Area I, Group B, Topic 2 — Statement of activities
assessment of preparing a statement of cash flows as follows: “Prepare a statement of activities for a
using the direct method. The remaining task requires nongovernmental, not-for-profit entity, including donor
a candidate to prepare a statement of cash flow using restrictions and releases from donor restrictions,
the indirect method and required disclosures from from a trial balance and supporting documentation.”
supporting documentation. The change acknowledges Additionally, under the same Topic, an application task
that the direct method of cash flow reporting is rarely was added: “Report expenses by nature and function
used in practice. in either the statement of activities, the notes to the
financial statements or a statement of functional
expenses for a nongovernmental, not-for-profit entity.”
The scope of content tested is unchanged from the ED.

Payables and accrued liabilities Accounting for income taxes
An application task in FAR Area II, Group G — Payables The following application task in Area III, Group D —
and accrued liabilities, regarding the calculation Accounting for income taxes was removed: “Calculate
of the liabilities and assets resulting from asset the income tax expense, current taxes payable/
retirement obligations and preparing journal entries receivable and deferred tax liabilities/assets.” The
was deleted and replaced by a remembering and task was replaced with two application tasks. The first
understanding skill level task: “Recall the recognition task addresses the calculation of income tax expense
and measurement requirements for asset retirement and the second task addresses the calculation of
obligations.” Assessment at the remembering deferred tax assets and liabilities resulting from book
and understanding skill level for asset retirement to tax differences. The changes were made to provide
obligations was determined to be more closely aligned examples of the types of book to tax differences
to the knowledge and skills required of nlCPAs. eligible for testing. These are clarifications of the
tasks in the Group and the scope of content tested is
Equity unchanged from the ED.
The application task in Area II, Group I — Equity was
updated to include capital account activity from
pass-through entities in the list of examples. This is a
clarification of the task in the Group and the scope of
content tested is unchanged from the ED.
REG
Foreign bank accounts Fringe benefits
The name of REG Area I, Group C, Topic 2 was A task statement in REG Area IV, Group A — Gross
renamed to Substantiation and disclosure and the income (inclusions and exclusions) was revised
following remembering and understanding task was as follows: “Calculate the amounts that should be
added: “Recall requirements to report foreign bank included in an individual’s gross income as reported
accounts.” This is a clarification of the tasks in the on Form 1040 — U.S. Individual Income Tax Return,
Topic and the scope of content tested is unchanged including wages, interest and dividends, guaranteed
from the ED. payments received from a partnership, fringe benefits,
income from a qualified retirement plan and punitive
damages.” This is a clarification of the tasks in the
Topic and the scope of content tested is unchanged
from the ED.

BAR
Assessment of data and technology concepts detect, investigate and resolve potential discrepancies
Commenters sought more clarity on the assessment (e.g., errors, outliers, unexpected contract elements) in
of data and technology in BAR. Data analytics topics the recognition of revenue in the financial statements
are covered in both BAR Area I, Group A — Current using the five-step model.” The revised task statement
period/historical analysis, including the use of data, as adds clarity and specificity on the use of source data
well as BAR Area I, Group B—- Prospective analysis, and outputs from data analytic techniques to detect,
including the use of data. There are certain explicit investigate, and resolve potential discrepancies. This is
task statements related to data in BAR Area I, Group a clarification of the tasks in the Group and the scope
A and Group B (e.g., “Determine attribute structures, of content tested is unchanged from the ED.
format and sources of data needed to prepare
financial statement analysis” and “Determine methods Reportable segments
to transform (e.g., preparing, cleaning, scrubbing) A new remembering and understanding task was
structured and unstructured data to make it useful for added in BAR Area II, Group J — Public company
decision-making”). However, all of BAR Area I, Business reporting topics: “Recall the criteria used to identify
Analysis, includes the use of data implicitly. Task-based reportable segments.” Identifying reportable segments
simulations may include exhibits with relevant data is a practice issue that nlCPAs need to understand.
needed to complete the tasks. The change is an expansion of the scope of content
tested from the ED.
To clarify how data and technology concepts are
assessed in BAR, the Section Introduction was revised State and local governments
to provide further details including adding language
focused on: A task in BAR Area III, Group A, Topic 5 — Notes
to financial statements was revised as follows:
• The verification of the completeness and accuracy “Recall the disclosure requirements for significant
of source data used in comparing historical results accounting policies, infrastructure and capital assets
to budgets and forecasts and deriving the impact and long-term liabilities in the notes to the basic
of transactions and events (actual and proposed) financial statements of state and local governments.”
The change was made to limit the scope of the note
• The use of outputs for data analytic techniques to
disclosure content tested from the ED. Additionally,
explain an entity’s results or to identify and detect
two new remembering and understanding tasks were
discrepancies.
added in BAR Area III, Group C, Topic 4 — General and
This is a clarification of the assessment of data and proprietary long-term liabilities: “Recall the recognition
data analytics in BAR Area I and the scope of content and measurement requirements for a net pension
tested is unchanged from the ED. liability for a defined benefit pension plan for state
and local governments” and “Recall the recognition
Revenue recognition and measurement requirements for a net other post
employment benefit (OPEB) liability for an OPEB plan
The following analysis task in BAR Area II, Group C —
for state and local governments.” The new tasks
Revenue recognition was removed: “Reconcile and
cover significant liabilities of many state and local
investigate differences between the sales subledger
governments of which nlCPAs should be aware. The
and the general ledger to determine whether an
new tasks are an expansion of the scope of content
adjustment is necessary.” This task was replaced
tested from the ED.
with “Interpret source data and outputs from data
analytic techniques (e.g., reports, visualizations) to

ISC
Regulations, standards and frameworks • E xplain the different environments used
Commenters asked for more clarity on the scope (e.g., development, staging, production) and
of ISC Area II, Group A - Regulations, standards and the types of tests performed (e.g., unit,
frameworks and the relationship to the References integration, system, acceptance).
provided at the end of the ISC Section Introduction. • E xplain the approaches that can be used
The Updates to Section Introductions, Summary when converting to a new information
Blueprints, and References section above provides system (e.g., direct, parallel, pilot).
insight to revisions of the References to each Exam
section, including ISC. • Explain patch management.
The ISC Section Introduction was updated to include Application representative task:
a paragraph describing how ISC Area II, Group A —
• Test the design and implementation of change
Regulations, standards, and frameworks assesses
control policies (e.g., acceptance criteria, test
the foundational knowledge of certain regulations,
results, logging, monitoring) for IT resources
standards, and frameworks related to security,
(e.g., applications, infrastructure components,
confidentiality, and privacy at the remembering and
configurations) in organizations, including those
understanding level. Further, the new paragraph
that have adopted continuous integration and
describes how those regulations, standards, and
continuous deployment processes.
frameworks underpin the higher order skills tested in ISC
Area II, Group B — Security; Group C — Confidentiality
Threats and attacks and mitigation
and privacy; and Group D — Incident response.
A new application task was added to ISC Area II,
Additionally, the Section Introduction discussion of ISC Group B, Topic 1 — Threats and attacks: “Determine
Area III: Considerations for System and Organization the specific cybersecurity threats to an organization’s
Controls (SOC) Engagements was revised to indicate on-premise and cloud-based applications, networks
how the Area focuses on aspects that are unique and connected devices (e.g., mobile and Internet of
considerations in SOC engagements distinct from Things (IOT) devices).”
other types of attestation engagements.
A new application task was added to ISC Area II,
Change management Group B, Topic 2 — Mitigation: “Determine the
appropriate authorization model (e.g., discretionary,
Commenters noted the importance of change
role-based, mandatory) and the controls (e.g., access
management in information systems and technology,
control list, account restrictions, physical barriers)
the related significant involvement of nlCPAs, and that
used to implement the model in a specific scenario.”
more focus and detail was needed in the Blueprints
in this regard. Tasks in ISC Area I, Group A, Topic 4 – All ISC changes described above are clarifications of
Change management were substantially revised to tasks in the section and the scope of content tested
read as follows: is unchanged from the ED.
Remembering and understanding representative tasks:
• E xplain the purpose of change management

related to internal hardware and software
applications, including the risks and the different
types of documentation used (e.g., system
component inventory, baseline configuration).

TCP
International Tax Issues and Tax Treaties Personal financial planning for individuals
Commenters sought more clarity on the assessment A new remembering and understanding task statement
of international tax issues in TCP. In response, the was added to TCP Area I, Group D – Personal
TCP Section Introduction discussion of Area II — financial planning for individuals: “Demonstrate an
Entity Tax Compliance was updated to include a understanding of the implications of legal ownership
statement that international tax issues will focus on of an asset and beneficiary designations on an estate
general concepts of income sourcing and allocation and its beneficiaries.” The new task addresses an
as opposed to specific foreign laws or treaties. This important personal financial planning consideration
change is a clarification of the tasks in the Area II, that nlCPAs encounter in practice. The task is an
Group A, Topic 4 and the scope of content tested is expansion of the scope of content tested from the ED.
unchanged from the ED.
Trusts
Revisions to Individual Compliance and A new remembering and understanding task was added
Tax Planning Considerations for Income
to TCP Area II, Group D, Topic 1 — Type of trusts: “Recall
Additions and clarifications were made to TCP Area and explain the characteristics of revocable trusts.” This
I, Group A — Individual compliance and tax planning is a clarification of the tasks in the Topic and the scope
considerations for gross income, adjusted gross of content tested is unchanged from the ED.
income, taxable income and estimated taxes. Two new
remembering and understanding tasks were added as Involuntary conversions
follows: “Recall items included in determination and
The first task statement in TCP Area IV, Group A —
computation of Alternative Minimum Taxable Income”
Nontaxable disposition of assets was revised to add
and “Calculate the tax on a child’s investment and other
involuntary conversions as follows: “Calculate the
unearned income.” The first task is an expansion of the
realized gain, recognized gain and deferred gain on
scope of content tested from the ED. The second task
like-kind property exchange and involuntary conversion
is clarification of the tasks in the Topic and the scope
transactions for tax purposes and the basis of the
of content tested is unchanged from the ED.
asset received as a result of the transactions.” This is a
In addition, a task was revised as follows: “Consider clarification of the tasks in the Topic and the scope of
the impact to an individual’s taxable income for content tested is unchanged from the ED.
certain items of gross income, including the exercise
of incentive stock options (ISO), imputed interest on
a below-market rate loan and compensation earned
while employed outside the U.S.” A new task was
added: “Recall the impact of equity compensation
awards on taxable income.” The changes limit the
scope of testing equity compensation awards in TCP
to the remembering and understanding skill level,
which is better aligned with what would be expected of
a nlCPA in practice.

General Comments
Agreement and support for CPA Evolution and • Skill levels in Discipline Exam sections should be
Practice Analysis process and results balanced to provide a comparable distribution
Overall, there was strong support for the proposed of skills tested in each Discipline, with a focus on
changes to the CPA Exam. Many commenters the higher remembering and understanding skill
applauded the move from the current structure of weighting in ISC.
four Exams to a Core and Discipline model to allow for
The 2016 Practice Analysis significantly focused
increased flexibility and allowing CPA candidates the
on enhancing the assessment of higher order skills.
opportunity to select a Discipline that is aligned to their
In that regard, the AICPA adopted a skill framework
current interests without restricting future professional
based on the revised Bloom’s Taxonomy of
practice. Commenters agreed that the changes
Educational Objectives4. Bloom’s Taxonomy
recognize the rapidly evolving skills and competencies
classifies a continuum of skills that students can
the profession requires today and moving forward,
be expected to learn and demonstrate.
namely critical thinking, problem-solving, analytical
ability, professional skepticism, and research. Many The representative tasks in the Blueprints combine
comments supported embedding data and technology both the applicable content knowledge and skills
in all Core and Discipline Exam sections as it is reflective required in the context of the work of an nlCPA. Based
of the knowledge and skills required of nlCPAs. on the nature of a task, one of four skill levels, derived
from the revised Bloom’s Taxonomy, was assigned to
Skill Levels each of the tasks, as follows:
Comments on skill levels assessed in the CPA Exam
could broadly be categorized into two groups:
• Evaluation skills should be assessed throughout

all Exam sections, not solely the AUD section.
Skill Levels
The examination or assessment of problems,

Evaluation and use of judgment to draw conclusions.
The examination and study of the interrelationships

Analysis of separate areas in order to identify causes and find
evidence to support inferences.
The use or demonstration of knowledge, concepts

Application or techniques.
Remembering The perception and comprehension of the significance

and Understanding of an area utilizing knowledge gained.
4
Revised taxonomy see Anderson, L. W., Krathwohl, D. R., & Bloom, B. S. (2001). A taxonomy for learning, teaching, and assessing: A revision of Bloom’s Taxonomy of educational
objectives (Complete ed.). Longman. For original taxonomy see Bloom, B. S. (1956). “Taxonomy of Educational Objectives, Handbook I: The Cognitive Domain.” New York: David
McKay Co Inc.

Evaluation and analysis skill levels are assessed in • ISC assesses audit skills and mindset (e.g., risk
the CPA Exam using TBSs; application skill level may assessment, professional skepticism, audit
be assessed using MCQs or TBSs. As noted above, evidence) in a domain that is relatively new to the
the evaluation skill includes the use of judgment profession (e.g., security, availability, confidentiality,
to draw conclusions. To be clear, the CPA Exam’s privacy). As such, nlCPAs in this domain are not
application and analysis tasks (and related TBSs) exposed to the same type tasks as nlCPAs in more
include problem solving, albeit more objectively, than traditional assurance roles.
the use of judgment in problem solving in evaluation
tasks. It is also relevant to highlight that often there is It should be noted that there was only one change to
an inverse relationship between the complexity of the CPA Exam section skill weights in the Blueprints. The
content subject matter and the skill level at which it is TCP skill weights were adjusted slightly from 30-40%
assessed. For example, interest rate derivatives are Analysis and 50-60% Application to 25-35% Analysis
assessed in BAR at an application skill level whereas and 55-65% for Application. This change resulted
concluding on significant estimates with a lower risk primarily from an adjustment to the skill level allocation
of material misstatement or complexity in AUD is in TCP Area II, Group A, Topic 2 — Transactions
assessed at an evaluation skill level. between a shareholder and a C corporation.
The section skill weights are developed using a Data analytics

bottoms-up approach. Through the PA, the AICPA Multiple comments were received on data analytics
determines Topic content weights within an Area being less robust in the FAR and BAR sections and
based on multiple data points including focus group focused on perceived differences between the CPA
input, survey data and Content Subcommittee Evolution Model Curriculum published in June 2021
experience, and skill allocations based on identified and the Blueprints.
representative tasks within each Topic. This
information is summarized by Group, Area, and Data, data analytics, and digital acumen are assessed
ultimately the Exam section; the resulting section skill to varying degrees throughout the CPA Exam sections.
weights are an outcome, not a starting point. This includes a focus on understanding how data is
structured and information flows through underlying IT
The Blueprints indicate the content, representative systems and business processes, determining methods
tasks, and skill levels for each CPA Exam section to transform data to make it useful for decision-making,
and are the result of the research undertaken in the verifying the completeness and accuracy of source data,
PA. The BOE approved the Blueprints, including the and using the outputs of automated tools, visualizations,
skill weights in each CPA Exam section and does not and data analytic techniques.
believe evaluation skills should be assessed in CPA
Exam sections other than AUD. The greatest concentrations of data and data analytics
assessment are in the AUD, ISC, and BAR sections,
The relatively higher level of remembering and followed by FAR, REG, and TCP. Assessment in the
understanding for the ISC section can be attributed to CPA Exam, including the nature and extent of content
three main causes: and tasks, is driven by the PA research.
• ISC subject matter, due to its technology-based Education has a much broader charge than the
nature, is changing more rapidly as compared to CPA Exam. Education, and hence the model curriculum,
subject matter of other CPA Exam sections. has an objective to prepare students for their careers,
• ISC subject matter is not as closely tied to belonging to and representing a profession. The
authoritative literature as the subject matter of CPA Exam’s role is related to licensure; it is the
other CPA Exam sections. gatekeeper, providing assurance that candidates
who pass the CPA Exam have the minimum level of

knowledge and skills to protect the public interest. The The AICPA and its BOE acknowledge the significance
BOE is comfortable with the nature and extent of data, of written communication for nlCPA practice and
data analytics, and digital acumen tested throughout regularly convey the same to educators, students, and
the Core and Discipline Exam sections. CPA Exam candidates. As previously addressed in the
document Infrastructure changes to the CPA Exam in
CPA Evolution Licensure Model 2024, the challenge is how to effectively assess written
Although many comments were supportive of the communication in the CPA Exam. The AICPA will
PA results and CPA Evolution, there were a few continue to monitor testing industry advancements
comments highlighting potential confusion with the in automated assessment of written communication
new licensure model. Commenters mentioned that the beyond basic writing skills and will consider its future
CPA Evolution-aligned CPA Exam seemed to support inclusion in the CPA Exam given costs and feasibility
specialization, which would be advantageous to larger for testing in a national licensure Exam.
accounting firms. Further, there were commenters
inquiring why the CPA License would not specify which Academic Resources
Discipline was passed. Comments on academic resources focused on
educator preparedness to support the CPA Exam
Pursuant to CPA Evolution, Discipline Exam sections Discipline sections, particularly new content areas
are designed to allow greater candidate flexibility in ISC. The commenters rightfully stated that the
and align to the demands of practice. Regardless success of CPA Evolution and the implementation
of a candidate’s chosen Discipline, CPA Evolution of the 2024 CPA Exam depends on how well the
leads to CPA licensure, with rights, privileges, and accounting educators prepare their students through
responsibilities consistent with the present CPA undergraduate and graduate-level studies. There were
license. CPA professional practice is not limited by the concerns expressed particularly around skills and
Discipline passed as professional standards provide resources to support ISC and digital and data acumen.
guidance related to required competence and due care
when performing professional services. The AICPA and NASBA anticipated these concerns,
publishing the CPA Evolution Model Curriculum in
Concerns were also expressed about the impact of June 2021 to assist academics and their institutions
CPA Evolution and resultant Exam changes on the to consider potential curriculum modifications to
pipeline of CPA candidates. The AICPA will work better align their programs with CPA Evolution. The
closely with NASBA to have candidate-focused AICPA has been producing monthly Faculty Hour
messaging beginning in 2023 to promote the 2024 webcasts to continue to provide practical support
CPA Exam and will monitor candidate behaviors in and insight to faculty on CPA Evolution changes and
2024 and beyond to continue to appropriately tailor how to incorporate relevant topics into coursework.
messaging supporting CPA Evolution, the value of Additionally, the AICPA has developed and/or obtained
licensure, and the importance of the profession. rights to faculty resources that are available at no
cost on the This Way to CPA faculty webpage. Finally,
Written Communication Removal the AICPA has been facilitating access to training
Comments on the removal of the written at reduced costs to assist faculty in developing
communication assessment from the CPA Exam necessary skills, particularly in the technology and
focused on the importance of communication in nlCPA data fields. The AICPA and NASBA will continue to
practice both in communicating with clients, and also work closely with accounting educators to ensure that
in documentation. The commenters were concerned the updates to the CPA Exam are well understood, that
that the removal of the written communications candidates understand the benefits of CPA Evolution,
requirement may send a message that these skills are and that appropriate resources are available to ease
not valued in the profession. the transition.

CPA Exam Transition Policy CPA Pipeline and the 150-Credit Hour
Education Requirement
Comments on the CPA Exam transition policy focused
on candidate awareness of the upcoming changes Comments on the 150-credit hour education
to the CPA Exam. Commenters were concerned that requirement for CPA licensure highlighted the
not enough of the impacted candidates are fully year-over-year declines in the number of students
aware of the transition and how best to navigate the graduating with an accounting degree. Commenters
transition policy. believe that the financial burden created by the
150-credit hour requirement as well as concerns about
The AICPA will continue to work closely with NASBA passing the CPA Exam are two factors contributing
to educate students, candidates, and academic to the declines. Other concerns included a perception
institutions to make certain that each has the among students that other college majors offer a more
knowledge and resources on the 2024 CPA Exam lucrative career path with less effort.
and the transition plans.
The 150-credit hour education requirement is part of
CPA Pipeline and CPA Exam changes the three Es — Education, Exam and Experience — that
provide the necessary rigor to support the practice
Commenters on the CPA pipeline shared concerns
of public accounting. Education supports students
that the changes to the CPA Exam would confuse
in developing the skills needed for their professional
candidates, and the addition of Discipline Exam sections
careers. The Exam is the gateway to licensure; it
would add complexity and difficulty to the CPA Exam,
ensures that candidates who pass the Exam have
thus driving students away from the profession. In
the minimum level of knowledge and skill to protect
response to concerns regarding the CPA pipeline and
the public interest. Experience helps to build out
the CPA Exam changes, the AICPA has communications
the practice aspects of education and protect the
and related initiatives in process or planned:
public interest. The public requires well educated,
• As part of 2023 CPA Exam candidate experienced CPAs.
communications, the AICPA will include
The AICPA is focused on the CPA pipeline trends.
messaging on what has changed in the 2024
The CPA pipeline declines have multifaceted causes
CPA Exam and what is similar to the current
ranging from U.S. birthrates and immigration
CPA Exam.
policies to the costs of higher education (including
• The AICPA will continue to communicate that the the additional 30 credit hours required for licensure)
Discipline Exam section selected does not restrict and number of students in the total undergraduate
future practice and that Discipline Exam sections population. Further causes of the decline are the image
will not lock candidates into a particular specialty. of the profession, starting salaries, the type and hours
of work, and firm hiring patterns.
• The AICPA’s firm communications will continue
to emphasize the benefits of CPA Evolution. There is no single solution to solving the CPA pipeline
Research has indicated firms would be more challenge. The AICPA is working with multiple
interested in hiring candidates who graduated constituencies including firms, NASBA and State
college with knowledge and skills aligned with Boards of Accountancy, State CPA Societies, the
the Discipline Exam sections. Center for Audit Quality, and academia to identify and
• The AICPA will continue to monitor the number
prioritize activities and solutions that can have the
of unique candidates sitting for the CPA Exam most impact on addressing the CPA pipeline issues.
and the numbers of each Core and Discipline Some of these activities include:
Exam sections taken. • Better positioning the profession for students/
candidates including adding flexibility in work
arrangements, hours worked, market-based
compensation, and advancement opportunities,

• Targeting high school students to encourage them Ultimately, the BOE concluded that assessment of
to select accounting programs when they enter accounting for state and local governments in FAR
college, and and BAR as described above is appropriate for nlCPA
practice in order to protect the public interest.
• E xploring opportunities to integrate career and
education to reduce the costs of meeting the
Federal accounting standards
150-credit hour requirement.
Various groups responded to the ED suggesting that
Additionally, the adoption of CPA Evolution Model the BOE consider adding testing of federal accounting
Curriculum by academia should provide firms with standards to the CPA Exam. Federal accounting
better-prepared students/candidates to address their standards are not tested on the current CPA Exam
talent challenges. and have not been tested in the past.
Commenters indicated the significance of federal

Other Exam Comments government accounting in terms of its magnitude in
both dollars expended and number of accountants
The following discussion addresses multiple
employed. Additionally, the civic aspects of
comments received on content assessed in the CPA
understanding and overseeing government were
Exam or that respondents believe should be assessed
highlighted.
in the CPA Exam. These comments were considered
by the AICPA and the BOE and were not implemented Federal accounting standards are considered a highly
for the rationales indicated. specialized area of accounting. Based on PA research,
firms who conduct federal government engagements
Accounting for state and local governments have no expectation that nlCPAs have knowledge of
Various groups responded to the ED regarding federal government accounting and reporting when
the assessment of accounting for state and local they are hired.
governments. Some comments were supportive of
Given the size and scope of federal government
the allocation of the assessment of accounting
engagements, there are relatively few firms that
for state and local governments between FAR and
specialize in these engagements. New auditors
BAR. Other comments suggested the assessment of
at these firms proceed through the firm’s regular
accounting for state and local governments should
foundational audit training. Staff selected to participate
only be in FAR. Additional comments suggested that
in federal government engagements receive
the CPA Exam should not assess accounting for state
specialized training, need to meet mandated CPE
and local governments.
requirements, and are generally not assigned to those
The FAR section will assess state and local government engagements unless they regularly work in that space.
concepts in FAR Area I, Group C – State and Local
Newly licensed CPAs on federal government
Government Concepts. A candidate will be required to
engagements often perform basic procedures that
recall the measurement focus and basis of accounting
require the same skills they acquire as part of the
used by state and local governments for fund and
foundational audit training. Much of a nlCPAs work is in
government-wide financial reporting and determine the
basic areas (e.g., cash and compliance testing). In most
appropriate fund(s) that a state or local government
cases, nlCPAs are focused on tests of the operational
should use to record its activities. The BAR section will
effectiveness of controls and not their design.
assess state and local government concepts in BAR
Newly licensed CPAs could be involved in system
Area III - State and Local Governments, which covers
walkthroughs, but this would most likely be done as
GASB’s financial accounting and reporting requirements
an observer with an experienced senior auditor. Newly
for state and local governments.
licensed CPAs would not be involved in considering or

evaluating appropriate accounting for the government costing as it relates to inventory and nlCPA practice is
clients to which they are assigned; this work is typically common. The AICPA considered allocating standard
handled by senior managers and partners. cost concepts to FAR Area II, Group C - Inventory, but
ultimately determined that the GAAP assessment
Ultimately, the BOE concluded that federal of lower of cost or market or lower of cost and net
accounting standards will not be included in the realizable value was sufficiently appropriate to test the
CPA Exam, and does not believe any changes to valuation of inventory in FAR (with cost being provided).
the FAR/BAR Blueprints for federal accounting The detail of applying standard cost concepts is not
standards are warranted. applicable to all nlCPAs and therefore is appropriate to
be assessed in BAR.
Cost accounting
Managerial and cost accounting will be assessed in
the BAR Area I, Group A, Topic 3 - Managerial and
cost accounting. A commenter noted that managerial
and cost accounting will not be assessed in any of
the Core Exam sections and suggested that standard

Appendix A
Uniform CPA Examination ®
Blueprints
Approved by the Board of Examiners
Dec. 1, 2022
Effective date: January 2024
Maintaining the Relevance of the Uniform CPA Examination® – Aligning the Exam with the CPA Evolution Licensure Model: Practice Analysis Final Report A1
Uniform CPA Examination Blueprints
Table of Contents
2 Introduction: Uniform CPA Examination Blueprints BAR1 Discipline Examination Section – Business Analysis
and Reporting (BAR)
AUD1 Core Examination Section – Auditing and Attestation (AUD) BAR2 Section Introduction
BAR6 Summary Blueprint
AUD2 Section Introduction
BAR7 Area I – Business Analysis
AUD6 Summary Blueprint
BAR11 Area II – Technical Accounting and Reporting
AUD7 Area I – Ethics, Professional Responsibilities
BAR15 Area III – State and Local Governments
and General Principles
AUD11 Area II – Assessing Risk and Developing a Planned ISC1 Discipline Examination Section – Information Systems
Response and Controls (ISC)
AUD17 Area III – Performing Further Procedures and ISC2 Section Introduction
Obtaining Evidence
ISC6 Summary Blueprint
AUD22 Area IV – Forming Conclusions and Reporting
ISC7 Area I – Information Systems and Data Management
FAR1 Core Examination Section – Financial Accounting ISC10 Area II – Security, Confidentiality and Privacy
and Reporting (FAR) ISC14 Area III – Considerations for System and Organization
FAR2 Section Introduction Controls (SOC) Engagements
FAR6 Summary Blueprint
TCP1 Discipline Examination Section – Tax Compliance
FAR7 Area I – Financial Reporting
and Planning (TCP)
FAR12 Area II – Select Balance Sheet Accounts TCP2 Section Introduction
FAR16 Area III – Select Transactions TCP5 Summary Blueprint
TCP6 Area I – Tax Compliance and Planning for Individuals
REG1 Core Examination Section – Taxation and Regulation (REG) and Personal Financial Planning
REG2 Section Introduction TCP9 Area II – Entity Tax Compliance
REG5 Summary Blueprint TCP14 Area III – Entity Tax Planning
REG6 Area I – Ethics, Professional Responsibilities TCP16 Area IV – Property Transactions (disposition of assets)
and Federal Tax Procedures
REG8 Area II – Business Law
REG11 Area III – Federal Taxation of Property Transactions
REG12 Area IV – Federal Taxation of Individuals
REG15 Area V – Federal Taxation of Entities
(including tax preparation)
Uniform CPA Examination Blueprints 1
Introduction
Uniform CPA Examination Blueprints
The CPA licensure model requires all candidates to pass three Core exam The table below presents the scoring weight of MCQs and TBSs for each Core
sections and one Discipline exam section of a candidate’s choosing. The Uniform and Discipline Exam section.
CPA Examination (the Exam) has been designed accordingly as reflected in the
Exam Blueprints. The Core exam sections assess the knowledge and skills that Score Weighting
all newly licensed CPAs (nlCPAs) need in their role to protect the public interest.
The Discipline exam sections assess the knowledge and skills in the respective Section
Multiple-Choice Tasked-Based
Questions (MCQs) Simulations (TBSs)
Discipline domain applicable to nlCPAs in their role to protect the public interest.
AUD – Core 50% 50%
The three Core exam sections, each four hours long, are: Auditing and Attestation
(AUD), Financial Accounting and Reporting (FAR) and Taxation and Regulation FAR – Core 50% 50%
(REG). The three Discipline exam sections, each four hours long, are: Business
Analysis and Reporting (BAR), Information Systems and Controls (ISC) and Tax REG – Core 50% 50%
Compliance and Planning (TCP).
BAR – Discipline 50% 50%
The table below presents the design of the Exam by Core and Discipline section,
ISC – Discipline 60% 40%
section time and question type.
TCP – Discipline 50% 50%
Multiple-Choice Tasked-Based
Section Section Time
Questions (MCQs) Simulations (TBSs)
The AICPA adopted a skill framework for the Exam based on the revised Bloom’s
AUD – Core 4 hours 78 7 Taxonomy of Educational Objectives1. Bloom’s Taxonomy classifies a continuum
of skills that students can be expected to learn and demonstrate.
FAR – Core 4 hours 50 7
REG – Core 4 hours 72 8
BAR – Discipline 4 hours 50 7
ISC – Discipline 4 hours 82 6
TCP – Discipline 4 hours 68 7
1
Revised taxonomy see Anderson, L.W. (Ed.), Krathwohl, D.R. (Ed.), Airasian, P.W., Cruikshank, K.A., Mayer, R.E., Pintrich, P.R., Raths, J., & Wittrock, M.C. (2001). A taxonomy for learning, teaching, and assessing: A revision of Bloom’s Taxonomy of Educational Objectives
(Complete Edition). New York: Longman. For original taxonomy see Bloom, B.S. (Ed.), Engelhart, M.D., Furst, E.J., Hill, W.H., & Krathwohl, D.R. (1956). Taxonomy of educational objectives: The classification of educational goals. Handbook 1: Cognitive domain. New York:
David McKay.
Introduction
Uniform CPA Examination Blueprints (continued)
Representative tasks that are critical to an nlCPA’s role in protecting the public Each section of the Exam has a section introduction and a corresponding
interest have been identified. The representative tasks combine both the section blueprint.
applicable content knowledge and skills required in the context of the work of
• The section introduction outlines the scope of the section, the content
an nlCPA. Based on the nature of a task, one of four skill levels, derived from the
organization and tasks, the content allocation, the overview of content
revised Bloom’s Taxonomy, is assigned to each of the tasks, as follows:
areas, section assumptions, the skill allocation and a listing of the section’s
applicable reference literature.
Skill Levels
• The section blueprint outlines the content to be tested, the associated skill
The examination or assessment of problems,
Evaluation level to be tested and representative tasks an nlCPA would likely encounter. The
and use of judgment to draw conclusions.
blueprints are organized by content AREA, content GROUP and content TOPIC.
The examination and study of the interrelationships Each topic includes one or more representative TASKS that an nlCPA may be
Analysis of separate areas in order to identify causes and find expected to complete.
The purpose of the blueprint is to:
Application or techniques. • Document the minimum level of knowledge and skills necessary for
initial licensure.
Remembering The perception and comprehension of the significance
and Understanding of an area utilizing knowledge gained. • Assist candidates in preparing for the Exam by outlining the knowledge
and skills that may be tested.
The skill levels to be assessed on each Core and Discipline section of the Exam
• Apprise educators about the knowledge and skills candidates will need
are included in the table below.
to function as nlCPAs.
Remembering and • Guide the development of Exam questions.
Section Application Analysis Evaluation
Understanding
AUD – Core 30–40% 30–40% 15–25% 5–15% The tasks in the blueprints are representative and are not intended to be
(nor should they be viewed as) an all-inclusive list of tasks that may be tested
FAR – Core 5–15% 45–55% 35–45% –
on the Exam. The number of tasks associated with a particular content group or
REG – Core 25–35% 35–45% 25–35% – topic is not indicative of the extent such content group, topic or related skill level
will be assessed on the Exam.
BAR – Discipline 10–20% 45–55% 30–40% –
ISC – Discipline 55–65% 20–30% 10–20% –
TCP – Discipline 5–15% 55–65% 25–35% –
Uniform CPA Examination
Auditing and Attestation (AUD)
Blueprint
Section Introduction
Auditing and Attestation

The Auditing and Attestation (AUD) section of the Uniform CPA Examination review services standards) to complete a range of tasks including identifying
(the Exam) tests the knowledge and skills that nlCPAs must demonstrate when issues, analyzing facts and determining appropriate responses.
performing the following engagements:
A list of reference materials relevant to the AUD section of the Exam is included
• Audit engagements include financial statement audits, compliance audits, under References at the conclusion of this introduction.
audits of internal control integrated with an audit of financial statements, audits
of entities receiving federal awards or grants and audits of financial statements Content organization and tasks
of employee benefit plans subject to the Employee Retirement Income Security The AUD section blueprint is organized by content AREA, content GROUP
Act of 1974 (ERISA). Audits include issuer entities subject to the requirements and content TOPIC. Each topic includes one or more representative TASKS
set forth by the Public Company Accounting Oversight Board (PCAOB), that an nlCPA may be expected to complete when performing various types
nonissuer entities subject to the requirements set forth by the American of engagements.
Institute of CPA’s (AICPA) Auditing Standards Board or governmental entities
The tasks in the blueprint are representative. They are not intended to be
subject to the requirements of the U.S. Government Accountability Office (GAO)
or the Office of Management and Budget (OMB).
in the AUD section of the Exam. Lists or examples included within the text of
• Attestation engagements include assertion-based examinations, direct a representative task beginning with the word “including” are not intended to
examinations and review or agreed-upon procedures engagements that are be exhaustive. Within some representative tasks are parenthetical lists. If a
subject to the requirements set forth by the AICPA’s Auditing Standards Board. parenthetical list begins with “e.g.”, this is not intended to be an exhaustive list but
rather examples of the types of content that could be assessed. Parenthetical lists
• Accounting and review service engagements include preparation, compilation
that do not include “e.g.” are intended to be an exhaustive list of the content to be
and review engagements that are subject to the requirements set forth by the
assessed with respect to that representative task.
AICPA’s Accounting and Review Services Committee.
Content allocation
The assessment will focus on an nlCPA’s role in planning, risk assessment,
The following table summarizes the content areas and the allocation of content
performing procedures, obtaining evidence and reporting for these engagement
tested in the AUD section of the Exam:
types. The assessment will incorporate:
• Data and technology concepts with a focus on understanding how data is Content area Allocation
structured and flows through underlying systems, verifying the completeness
and accuracy of source data and using the outputs of data analytic techniques Area I Ethics, Professional Responsibilities and General Principles 15–25%
to assist in risk assessment or to complete planned procedures.
Area II Assessing Risk and Developing a Planned Response 25–35%
• Professional skepticism and professional judgment with a focus on the critical
assessment of evidence and the need to apply knowledge and experience to Area III Performing Further Procedures and Obtaining Evidence 30–40%
make informed decisions.
Area IV Forming Conclusions and Reporting 10–20%
• Applied research with a focus on reviewing and using excerpts of source
materials (e.g., auditing standards, attestation standards, accounting and
Uniform CPA Examination Blueprints: Core Examination Section – Auditing and Attestation (AUD) AUD2
Auditing and Attestation (continued)

Overview of content areas • SOC 1® reports as they affect the audit of user-entity financial statements.
Area I of the AUD section blueprint covers ethics, professional responsibilities and
• Materiality including performance materiality or tolerable misstatement.
general principles, including the following:
• Assessing and responding to risks of material misstatement, whether
• Ethics and independence including understanding and applying the AICPA
due to fraud or error.
Code of Conduct and the ethical and independence requirements of the
U.S. Securities and Exchange Commission (SEC), PCAOB, GAO and Department • Planning for and using the work of others including management’s specialists
of Labor (DOL). and auditor’s specialists.
• Professional skepticism including the critical assessment of evidence and the • Specific areas of engagement risk including compliance with laws and
need to apply knowledge and experience to make informed decisions. regulations, accounting estimates, related parties and requirements for
single audits in accordance with the Uniform Guidance for Single Audits.
• Nature, scope and terms of engagements including engagement preconditions.
• Requirements for engagement documentation and communication with To the extent applicable, the audits of financial statements of employee benefit
management or those charged with governance. plans subject to ERISA are eligible for testing in each group and topic in this Area.
• Understanding of audit and assurance quality on an engagement and Area III of the AUD section blueprint covers performing procedures and obtaining
responsibilities within a firm. evidence. The Area includes the following:
To the extent applicable, the audits of financial statements of employee benefit • Use of data and information including requesting, preparing and transforming
plans subject to ERISA are eligible for testing in each group and topic in this Area. data, reliability of data and information and data analytics.
• Sufficient appropriate evidence including sources of evidence and concluding

Area II of the AUD section blueprint covers planning and risk assessment and
on whether evidence obtained achieves the engagement’s planned objectives.
design of procedures responsive to identified risks. The Area includes the following:
• Sampling techniques including appropriate populations, sample size,
• Engagement strategy and engagement planning.
stratification and extrapolation of results.
• Internal and external factors related to understanding an entity and its
• Performing procedures to obtain evidence including tests of controls, tests of
environment including basic economic concepts such as supply and
details, analytical procedures and external confirmations.
demand and business cycles.
• Specific matters that require special audit consideration such as accounting
• Understanding an entity’s control environment and business processes including
estimates, investments in securities, inventory, litigation, claims and
an understanding of the COSO Internal Control – Integrated Framework,
assessments, going-concern and testing transactions related to federal awards
entity-level controls and the design of internal controls, IT environment and related
during a single audit.
IT general controls. The IT environment consists of an entity’s IT infrastructure,
applications, processes to manage access to the IT environment and program • Misstatements and internal control deficiencies including preparing a summary
change control, including personnel responsible for those processes. of misstatements and determining their effect on the financial statements and
the nature, timing and extent of procedures.

• Written representations requested from management. To the extent that there are different requirements for an entity under audit
or review, the question will include an explicit reference to the entity type
• Subsequent events including identification of subsequent events and the impact
(issuer or nonissuer).
to an entity’s financial statements and disclosures.
Questions may refer to an audit engagement by including phrases such as
To the extent applicable, the audits of financial statements of employee benefit
“an audit of a nonissuer” or “an audit of an issuer”. Questions will refer to other
plans subject to ERISA are eligible for testing in each group and topic in this Area.
types of engagements by including phrases such as “examination of pro forma
Area IV of the AUD section blueprint covers engagement reporting. The Area financial information”, “review engagement”, “interim review”, “compilation
includes the following: engagement”, etc. The use of the terms “auditor”, “accountant” or “practitioner”
will also be used to further identify engagement types and applicable professional
• Reporting on auditing and attestation engagements including factors to standards. Candidates should be mindful of the engagement type when
consider when forming an opinion, types of opinions and the appropriate answering a question.
form and content of a report.
Skill allocation
• Considerations for performing preparation engagements. The Exam applies a skill framework based on the revised Bloom’s Taxonomy
• Considerations for reporting on compilation and review engagements, including of Educational Objectives². Bloom’s Taxonomy classifies a continuum of skills
the appropriate form and content of a report. depicted in the table below:
• Considerations for reporting on compliance aspects as part of an audit Skill Levels

engagement or an attestation engagement related to compliance with a
specific requirement or rule. The examination or assessment of problems, and use
Evaluation of judgment to draw conclusions.
• Other reporting considerations when performing engagements, including
consistency, other information, review of interim financial information, The examination and study of the interrelationships
Analysis of separate areas in order to identify causes and find
supplementary information, special-purpose frameworks and additional
reporting requirements under GAO Government Auditing Standards.
Section assumptions Application or techniques.
The AUD section of the Exam includes multiple-choice questions and
task-based simulations. When completing multiple-choice questions and Remembering The perception and comprehension of the significance
task-based simulations in the AUD section of the Exam, candidates should and Understanding of an area utilizing knowledge gained.
be aware of the entity type and engagement type presented in the question.
2
David McKay.
The AUD section of the Exam assesses content at all of the skill levels of Bloom’s • PCAOB Auditing Standards (SEC approved), Auditing Interpretations and Ethics
Taxonomy as described below: and Independence Rules
• Remembering and Understanding is mainly concentrated in Area I and Area IV. • U.S. GAO Government Auditing Standards
Area I contains much of the general audit knowledge that is required for nlCPAs.
• Single Audit Act, as amended
In Area IV, many of the tasks relate to reporting and are driven by templates and
illustrative examples. • OMB Audit Requirements for Federal Awards (2 CFR 200)
• Application is tested in all four areas of the AUD section. Application tasks focus • AICPA Statements on Quality Control Standards
on general topics such as professional responsibilities and documentation, and
the day-to-day tasks that nlCPAs perform, using standardized application tools • AICPA Statements on Standards for Accounting and Review Services
such as audit programs and sampling techniques. and Related Accounting and Review Services Interpretations
• Analysis and Evaluation skills, tested in Area II and Area III, involve tasks that • AICPA Statements on Standards for Attestation Engagements
require a higher level of analysis and interpretation. These tasks, such as and Interpretations
concluding on sufficiency and appropriateness of evidence, require nlCPAs to • AICPA Audit and Accounting Guides
apply professional skepticism and judgment.
• AICPA Code of Professional Conduct
The representative tasks combine both the applicable content knowledge and
• Title III and Title IV of the Sarbanes-Oxley Act of 2002
the skills required in the context of the work that an nlCPA would reasonably be
expected to perform. • U.S. DOL Interpretive bulletins relating to guidelines on independence of
accountant retained by Employee Benefit Plan (29 CFR 2509.75-9)
References – Auditing and Attestation
The References detailed below are the sources of the subject matter eligible for • U.S. SEC Independence Rules
assessment in the AUD section, to the extent that the subject matter is included
• The Committee of Sponsoring Organizations of the Treadway Commission
in the blueprint’s content areas, groups and topics. Further, the assessment of the
(COSO): Internal Control — Integrated Framework
subject matter described in a representative task that identifies an organization,
publication, law, regulation, standard or framework is limited to the specific • Current textbooks on auditing, attestation services, economics and ethics
sections of the References detailed below. Similarly, subject matter identified in and independence
a representative task and related subject matter is eligible for assessment to the
extent it is included in the References detailed below.
• AICPA Statements on Auditing Standards and Related Auditing Interpretations
Summary Blueprint
Content area allocation Weight
I. Ethics, Professional Responsibilities and General Principles 15–25%
II. Assessing Risk and Developing a Planned Response 25–35%
III. Performing Further Procedures and Obtaining Evidence 30–40%
IV. Forming Conclusions and Reporting 10–20%
Skill allocation Weight
Evaluation 5–15%
Analysis 15–25%
Application 30–40%
Remembering and Understanding 30–40%
The following pages include the detailed blueprints that define the areas, groups,
topics and representative tasks for the AUD section. It is important to note that
the number of representative tasks associated with a particular content group or
topic is not indicative of the extent to which such content group, topic or related
skill level will be assessed on the Exam (i.e., more numerous tasks in a particular
group, topic or skill compared to another should not infer more content weight
assigned to that group, topic or skill).
Area I – Ethics, Professional Responsibilities and General Principles (15–25%)

Skill
Remembering
Content group/topic Application Analysis Evaluation Representative Task
& Understanding
A. Ethics, independence and professional responsibilities
1. AICPA Code of Understand the principles, rules and interpretations included in the AICPA Code
Professional Conduct of Professional Conduct.
Apply the principles, rules and interpretations included in the AICPA Code of
Professional Conduct to situations.
Apply the Conceptual Framework for Members in Public Practice and Members
in Business included in the AICPA Code of Professional Conduct to situations
that could present threats to compliance with the rules included in the Code.
Apply the Conceptual Framework for Independence included in the AICPA Code
of Professional Conduct to situations that could present threats to compliance
with the rules included in the Code.
2. Requirements of the Securities Understand the ethical and independence requirements of the Securities and
and Exchange Commission and Exchange Commission and the Public Company Accounting Oversight Board.
the Public Company Accounting
Oversight Board Apply the ethical requirements and independence rules of the Securities and
Exchange Commission and the Public Company Accounting Oversight Board to
situations that could compromise compliance or impair independence during
an audit of an issuer.
3. Requirements of the Government Understand the ethical and independence requirements of the Government
Accountability Office and the Accountability Office Government Auditing Standards.
Department of Labor
Understand the independence requirements of the Department of Labor.
Area I – Ethics, Professional Responsibilities and General Principles (15–25%) (continued)

Skill
Remembering
& Understanding
A. Ethics, independence and professional responsibilities (continued)
3. Requirements of the Government Apply the ethical requirements and independence rules of the Government
Accountability Office and the Accountability Office Government Auditing Standards to situations that could
Department of Labor (continued) present threats to compliance during an audit of, or attestation engagement
for, a government entity or an entity receiving federal awards.
Apply the independence rules of the Department of Labor to situations when an

accountant would not be considered independent during an audit of employee
benefit plans.
B. Professional skepticism and professional judgment
Understand the concepts of professional skepticism and professional judgment.
Understand unconscious auditor biases and other impediments to acting with

professional skepticism, including threats, incentives and judgment-making
shortcuts.
C. Nature and scope
1. Audit engagements Identify the nature, scope and objectives of the different types of audit
engagements for issuers and nonissuers.
2. Engagements conducted under Identify the nature, scope and objectives of engagements performed in
Government Accountability Office accordance with Government Accountability Office Government Auditing
Government Auditing Standards Standards, including single audits.
3. Other engagements Identify the nature, scope and objectives of attestation engagements and
accounting and review service engagements.

Skill
Remembering
& Understanding
D. Terms of engagement
1. Preconditions for an engagement Identify the preconditions needed for accepting or continuing an engagement.
2. Terms of engagement and the Identify the factors affecting the acceptance or continuance of an engagement,
engagement letter including communication with predecessor auditors.
Recall when it is acceptable to agree to management’s request for a change

in the type of engagement (e.g., from an audit to a review).
Perform procedures to confirm that a common understanding of the terms

of an engagement exist with management and those charged with governance.
Document the terms of an engagement in a written engagement letter or

other suitable form of written agreement.
E. Requirements for engagement documentation
Identify the elements that comprise sufficient appropriate documentation in

physical or electronic form for an engagement.
Identify the requirements for the assembly and retention of documentation in

physical or electronic form for an engagement.
Prepare documentation that is sufficient to enable an experienced auditor or

practitioner having no previous connection with an engagement to understand the
nature, timing, extent and results of procedures performed, the significant findings
and conclusions reached and the significant professional judgments made.

Skill
Remembering
& Understanding
F. Communication with management and those charged with governance
1. Planned scope and timing Identify the matters related to the planned scope and timing of an engagement
of an engagement that should be communicated to management and those charged with
governance.
Prepare presentation materials and supporting schedules for use in communicating

the planned scope and timing of an engagement to management and those charged
with governance.
2. Internal control related matters Identify the matters related to deficiencies and material weaknesses in internal
control that should be communicated to those charged with governance and
management for an engagement and the timing of such communications.
Prepare written communication materials for use in communicating identified

internal control deficiencies and material weaknesses for an engagement to
those charged with governance and management.
G. Audit and assurance quality
Identify a CPA firm’s responsibilities for its accounting and auditing practice’s
engagement quality.
Explain procedures and responsibilities for managing engagement quality.
Area II – Assessing Risk and Developing a Planned Response (25–35%)

Skill
Remembering
& Understanding
A. Planning an engagement
1. Overall engagement strategy Explain the purpose and significance of the overall engagement strategy
for an engagement.
2. Engagement plan Prepare a draft engagement plan for specific processes, accounts or classes
of transactions considering the prior period and changes in the current period.
Prepare supporting planning-related materials (e.g., client assistance request

listings, time budgets) for a detailed engagement plan starting with the prior-year
engagement plan or with a template.
B. Understanding an entity and its environment
1. External factors Understand supply and demand, elasticity measures and profit maximization
(e.g. marginal cost, marginal revenue).
Understand the business cycles (trough, expansion, peak, recession) and leading,
coincident and lagging indicators of economic activity (e.g., consumer price index,
producer price index, federal funds rate, bond yields, unemployment).
Identify relevant factors (e.g., economic, environmental, financial reporting

framework, government policy, industry, regulatory, supply chain, technology)
that could impact an entity, its operations, and/or the inherent risk of
material misstatement.
2. Internal factors Understand the entity’s responsibilities with respect to the corporate governance
provisions of the Sarbanes-Oxley Act of 2002.
Identify the relevant factors that define the nature of an entity, including the
impact on the risk of material misstatement (e.g., its operations, ownership and
governance structure, investment and financing plans, selection of accounting
policies and objectives and strategies).
Area II – Assessing Risk and Developing a Planned Response (25–35%) (continued)

Skill
Remembering
& Understanding
C. Understanding an entity’s control environment and business processes, including information technology (IT) systems
1. COSO Internal Control – Define internal control within the context of the COSO internal control framework,
Integrated Framework including the purpose, objectives and limitations of the framework.
Identify and define the components, principles and underlying structure of the
COSO internal control framework.
2. Control environment, IT general Understand the elements of an entity’s control environment, including the design
controls, and entity-level controls and implementation of IT general controls and entity-level controls.
Perform procedures to obtain an understanding of how an entity has responded

to risks arising from the use of IT, including identifying and testing the design and
implementation of relevant IT general controls.
3. Business processes and the Identify and document the significant business processes and data flows that
design of internal controls, directly or indirectly impact an entity’s financial statements.
including the IT environment
Perform a walkthrough of a significant business process and document
(e.g., flow charts, process diagrams, narratives) the flow of relevant transactions
and data from initiation through financial statement reporting and disclosure.
Obtain an understanding of an entity’s IT infrastructure (e.g., ERP, cloud computing

or hosting arrangements, custom or packaged applications) and document the
procedures performed to obtain that understanding.
Obtain an understanding of IT applications that are, directly or indirectly, the source

of financial transactions or the data used to record financial transactions (e.g., how
the entity uses IT applications to capture, store, and process information).
Perform tests of the design and implementation of relevant automated and

manual transaction-level internal controls (e.g. authorizations and approvals,
reconciliations, verifications, physical or logical controls, segregation of duties).

Skill
Remembering
& Understanding
C. Understanding an entity’s control environment and business processes, including information technology (IT) systems (continued)
3. Business processes and the Identify and document the relevant automated and manual controls within the flow
design of internal controls, of an entity’s transactions for a significant business process and consider the effect
including the IT environment of these controls on the completeness, accuracy and reliability of an entity’s data.
(continued)
Conclude whether relevant automated and manual transaction-level internal
controls are effectively designed and placed in operation.
4. Implications of an entity Understand the differences between SOC 1® and SOC 2® engagements.
using a service organization
Identify and document the purpose and significance of an entity’s use of a service
organization, including the impact of using a SOC 1® Type 2 report in an audit of
an entity’s financial statements.
Use a SOC 1® Type 2 report to determine the nature and extent of testing procedures
to be performed in an audit of an entity’s financial statements.
5. Limitations of controls and Understand the limitations of internal controls and the potential impact on the risk
risk of management override of material misstatement of an entity’s financial statements.
Identify and document the risks associated with management override of internal
controls and the potential impact on the risk of material misstatement of an
entity’s financial statements.
D. Materiality
1. For the financial statements Understand materiality, including qualitative considerations, as it relates to the
as a whole financial statements and related disclosures as a whole.
Calculate materiality for an entity’s financial statements as a whole.
Calculate the materiality level (or levels) to be applied to classes of transactions,

account balances and disclosures in an audit of an issuer or nonissuer.

Skill
Remembering
& Understanding
D. Materiality (continued)
2. Tolerable misstatement Understand the use of tolerable misstatement or performance materiality in an

and performance materiality audit.
Determine tolerable misstatement or performance materiality for the purposes of

assessing the risk of material misstatement and determining the nature, timing
and extent of further audit procedures in an audit of an issuer or nonissuer.
E. Assessing and responding to risks of material misstatement, whether due to fraud or error
Determine the pressures, incentives and opportunities for fraud (e.g., fraudulent
financial reporting, misappropriation of assets) that could lead to the risk of
material misstatement.
Determine risk of material misstatement, whether due to fraud or error, at the

financial statement level and relevant assertion level for each significant class
of transactions, significant account and disclosure.
Determine a response to risks of material misstatement at the financial statement

level (e.g. maintaining professional skepticism, engagement team supervision,
incorporating elements of unpredictability), considering the auditor’s understanding
of the control environment.
Determine appropriate procedures to assess the operating effectiveness

of relevant controls.
Determine appropriate substantive procedures to test relevant assertions for each

significant class of transactions, significant account and disclosure.
Determine procedures to satisfy the requirements and objectives of an attestation

engagement.
Determine procedures to satisfy the requirements and objectives of an accounting

and review services engagement.

Skill
Remembering
& Understanding
E. Assessing and responding to risks of material misstatement, whether due to fraud or error (continued)
Assess risks of material misstatement, whether due to fraud or error, at the

financial statement level and develop a response by leveraging the combined
knowledge and understanding of the engagement team.
Assess the potential impact of identified risks of material misstatement at the

relevant assertion level for each significant class of transactions, significant
account and disclosure, considering the controls the auditor intends to test.
Analyze the risk of material misstatement, including the potential impact of

individual and cumulative misstatements, to provide a basis for developing
planned audit procedures.
Use outputs from audit data analytic procedures (e.g. reports and visualizations)
to identify transactions that may have a higher risk of material misstatement and
interpret the results to develop planned audit procedures.
F. Planning for and using the work of others
Identify the factors to consider in determining the extent to which an engagement

team can use the work of the internal audit function, IT auditor, auditor’s specialist,
management’s specialist or a component auditor.
Determine the nature and scope of the work of the internal audit function, IT
auditor, auditor’s specialist, management’s specialist or component auditor.
Perform and document procedures to determine the extent to which an

engagement team can use the work of the internal audit function, IT auditor,
auditor’s specialist, management’s specialist or a component auditor.

Skill
Remembering
& Understanding
G. Specific areas of engagement risk
1. An entity’s compliance Understand the accountant’s responsibilities with respect to laws and regulations
with laws and regulations that have a direct effect on the determination of material amounts or disclosures
in an entity’s financial statements for an engagement.
Understand the accountant’s responsibilities with respect to laws and regulations

that are fundamental to an entity’s business but do not have a direct effect on the
entity’s financial statements in an engagement.
Perform tests of compliance with laws and regulations that have a direct
effect on material amounts or disclosures in an entity’s financial statements
in an engagement.
Perform tests of compliance with laws and regulations that are fundamental to
an entity’s business, but do not have a direct effect on the entity’s financial
statements for an engagement.
2. Accounting estimates Recognize the potential impact of lower complexity and higher complexity
significant accounting estimates on the risk of material misstatement, including the
indicators of management bias.
3. Related parties and related Perform procedures to identify related party relationships and transactions,
party transactions including consideration of significant unusual transactions and transactions
with executive officers.
4. Uniform Guidance Understand when an entity is required to have a single audit in accordance with
for single audits the audit requirements of the Uniform Guidance, including the identification of
federal awards and major programs.
Area III – Performing Further Procedures and Obtaining Evidence (30–40%)

Skill
Remembering
& Understanding
A. Use of data and information
1. Requesting, preparing Explain the components of a relational database (e.g., tables, records, fields/
and transforming data attributes, primary and foreign keys, normalization).
Explain the characteristics and uses of different measurement scales (e.g.,

nominal, ordinal, interval, ratio, continuous, discrete).
Determine attribute structures, format, and sources of data needed when making
a data extraction request to complete planned procedures.
Determine methods to transform (e.g., preparing, cleaning, scrubbing) data to

complete planned procedures.
2. Reliability of data Perform procedures (e.g., agreeing information to original sources such as general
and information ledger, subledger or external information sources, validating search or query
criteria used to obtain data) to validate the reliability (completeness, accuracy,
authenticity and susceptibility to management bias) of data and information
obtained.
3. Data analytics Describe how to apply automated tools and techniques to process, organize,
structure or present data in a given context to generate useful information that
can be used as evidence.
Perform procedures using outputs (e.g. reports, visualizations) from audit data
analytic techniques to determine relationships, trends or notable items in the
data and identify the appropriate audit response.
B. Sufficient appropriate evidence
Determine the sources of sufficient appropriate evidence (e.g., obtained from

management specialists, obtained from external sources, developed by the audit
team from internal or external sources).
Area III – Performing Further Procedures and Obtaining Evidence (30–40%) (continued)
Skill
Remembering
& Understanding
B. Sufficient appropriate evidence (continued)
Exercise professional skepticism and professional judgment while analyzing

information to be used as audit evidence taking into account its relevance and
reliability, authenticity and whether such information corroborates or contradicts
the assertions in the financial statements.
Conclude whether sufficient appropriate evidence has been obtained to achieve

the objectives of the planned procedures.
C. Sampling techniques
Understand the purpose and application of sampling techniques including the use
of automated tools and audit data analytic techniques to identify significant events
or transactions that may impact the financial statements.
Identify the appropriate population of items to sample to meet the objectives of

the planned procedures.
Determine the appropriate sampling method to be used in order to accomplish

the objective (control, attribute, test of detail) of the planned procedures.
Use sampling techniques to extrapolate the characteristics of a population

from a sample of items.
D. Procedures to obtain sufficient appropriate evidence
1. Test of controls Use observation and inspection to obtain evidence.

and test of details
Use recalculation (manually or using automated tools and techniques) to test
the mathematical accuracy of information to obtain evidence.
Use reperformance to independently execute procedures or controls to

obtain evidence.
Inquire of management and others to gather evidence and document the results.
Skill
Remembering
& Understanding
D. Procedures to obtain sufficient appropriate evidence (continued)
1. Test of controls and Analyze responses obtained during structured interviews or informal
test of details (continued) conversations with management and others, including those in non-financial
roles, and ask relevant and effective follow-up questions to understand their
perspectives and motivations.
Perform tests of operating effectiveness of internal controls, including the analysis

of exceptions to identify deficiencies in an audit of financial statements or an audit
of internal control.
Perform tests of details, including the analysis of exceptions, to identify potential

misstatements in an audit of financial statements.
2. Analytical procedures Determine the suitability of substantive analytical procedures to provide evidence
to support an identified assertion.
Perform substantive analytical procedures, including developing an expectation,

on an account balance to provide evidence to support an identified assertion.
Perform analytical procedures near the end of an audit engagement that assist
the auditor when forming an overall conclusion about whether the financial
statements are consistent with the auditor’s understanding of the entity.
Evaluate and investigate differences resulting from analytical procedures

(e.g., fluctuations or relationships that are inconsistent with other information
or expected values).
3. External confirmations Confirm significant account balances and transactions using appropriate tools
and techniques (e.g., confirmation services, electronic confirmations, manual
confirmations) to obtain relevant and reliable evidence.
Analyze external confirmation responses to determine the need for follow-up

or further investigation.
Skill
Remembering
& Understanding
E. Specific matters that require special consideration
1. Accounting estimates Recalculate and reperform procedures to validate the inputs and assumptions
of an entity’s significant accounting estimates with a higher risk of material
misstatement or complexity, such as fair value estimates.
Perform procedures (e.g. reviewing the work of a specialist and procedures

performed by the engagement team) to validate an entity’s calculations and
detailed support for significant accounting estimates, including consideration of
information that contradicts assumptions made by management.
Conclude on the reasonableness of significant accounting estimates with a lower

risk of material misstatement or complexity in an audit.
2. Investments in securities Identify the considerations relating to the measurement and disclosure of the fair
value of investments in securities in an audit.
Test management’s assumptions, conclusions and adjustments related to the

valuation of investments in securities in an audit.
3. Inventory and inventory Test the ending inventory quantities in an audit by obtaining evidence regarding
held by others the existence and condition of inventory and inventory held by others (e.g.,
inventory counting procedures, confirmation) and conclude whether inventory
records accurately reflect count results.
4. Litigation, claims and assessments Perform appropriate audit procedures, including inquiring of management and
others, reviewing minutes and sending external confirmations, to detect the
existence of litigation, claims and assessments.
5. An entity’s ability to continue Identify factors that should be considered while performing planned procedures
as a going concern that may indicate substantial doubt about an entity’s ability to continue as a going
concern for a reasonable period of time.
Skill
Remembering
& Understanding
E. Specific matters that require special consideration (continued)
6. Uniform Guidance for single audits Test transactions related to federal awards for compliance with statutes,
regulations, and the terms and conditions of the federal awards.
F. Misstatements and internal control deficiencies
Prepare a summary of corrected and uncorrected misstatements.
Determine the effect of uncorrected misstatements on an entity’s financial

statements in an engagement.
Determine the effect of identified misstatements on the assessment of internal

control over financial reporting, individually and in the aggregate.
Evaluate internal control deficiencies to determine potential impact on the nature,

timing, and extent of audit procedures.
G. Written representations
Identify the written representations that should be obtained from management or

those charged with governance in an engagement.
H. Subsequent events and subsequently discovered facts
Recall the impact of subsequently discovered facts on the auditor’s report.
Perform procedures to identify subsequent events that should be reflected

in an entity’s current period financial statements and disclosures.
Determine whether identified subsequent events are appropriately reflected

in an entity’s financial statements and disclosures.
Area IV – Forming Conclusions and Reporting (10–20%)

Skill
Remembering
& Understanding
A. Reporting on audit engagements
Identify the factors that an auditor should consider when forming an opinion on an
entity’s financial statements.
Identify the factors that an auditor should consider when forming an opinion on
the effectiveness of internal control in an audit of internal control over financial
reporting that is integrated with an audit of financial statements.
Identify the type of opinion (unqualified or unmodified, qualified, adverse, or

disclaimer of opinion) that an auditor should render on the audit of an issuer
or nonissuer’s financial statements.
Identify the appropriate use of emphasis-of-matter and other-matter

(explanatory) paragraphs.
Determine the appropriate form and content of an auditor’s report for an

engagement, including the appropriate use of emphasis-of-matter and
other-matter (explanatory) paragraphs.
Determine the appropriate form and content of a report on the audit of internal
control over financial reporting, including report modifications and the use of
separate or combined reports for the audit of an entity’s financial statements and
the audit of internal control.
B. Reporting on attestation engagements
1. Examination or review Identify the factors that a practitioner should consider when issuing an
engagements assertion-based examination, direct examination or review report.
Determine the appropriate form and content of an accountant’s report for

an assertion-based examination, direct examination, or review for an
attestation engagement.
Area IV – Forming Conclusions and Reporting (10–20%) (continued)

Skill
Remembering
& Understanding
B. Reporting on attestation engagements (continued)
2. Agreed-upon procedures Identify the factors that a practitioner should consider when issuing an
engagements agreed-upon procedures report for an attestation engagement.
Determine the appropriate form and content of an agreed-upon procedures

report for an attestation engagement.
C. Accounting and review service engagements
1. Preparation engagements Identify the factors that an accountant should consider when performing a
preparation engagement.
2. Compilation engagements Identify the factors that an accountant should consider when reporting on an
engagement to compile an entity’s financial statements.
Determine the appropriate form and content of an accountant’s report for a

compilation engagement.
3. Review engagements Identify the factors that an accountant should consider when reporting on an
engagement to review an entity’s financial statements.
Determine the appropriate form and content of an accountant’s report for a

review engagement.
D. Reporting on compliance
Identify the factors that an auditor should consider when reporting on compliance
with aspects of contractual agreements or regulatory requirements in connection
with an audit of an entity’s financial statements.
Identify the factors that a practitioner should consider when reporting on an

attestation engagement related to an entity’s compliance with the requirements
of specified laws, regulations, rules, contracts or grants, and reports on the
effectiveness of internal controls over compliance with the requirements.
Area IV – Forming Conclusions and Reporting (10–20%) (continued)

Skill
Remembering
& Understanding
E. Other reporting considerations
1. Comparative statements and Identify the factors (change in accounting principle, the correction of a material
consistency between periods misstatement, or a material change in classification) that would affect the
comparability or consistency of financial statements.
2. Other information in documents Understand the auditor’s responsibilities related to other information included in
with audited statements documents with audited financial statements.
3. Review of interim financial Identify the factors an auditor should consider when reporting on an engagement
information to review interim financial information.
4. Supplementary information Identify the factors an auditor should consider when reporting on supplementary
information included in or accompanying an entity’s financial statements.
5. Additional reporting requirements Identify requirements under Government Accountability Office Government
under Government Accountability Auditing Standards related to reporting on internal control over financial
Office Government Auditing reporting and compliance with provisions of the law, regulations, contracts,
Standards grant agreements and federal awards that have a material effect on the
financial statements.
Understand the requirements when preparing the auditor’s report on compliance

and internal control over compliance – major programs and the auditor’s schedule
of findings and questioned costs for a single audit.
6. Special-purpose frameworks Identify the factors an auditor should consider when reporting on the audit of
financial statements prepared in accordance with the cash basis, tax basis,
regulatory basis, contractual basis or other basis of accounting.
Uniform CPA Examination Financial
Accounting and Reporting (FAR)
Blueprint
Financial Accounting and Reporting

The Financial Accounting and Reporting (FAR) section of the Uniform CPA Content organization and tasks
Examination (the Exam) assesses the knowledge and skills that nlCPAs must The FAR section blueprint is organized by content AREA, content GROUP and
demonstrate in the financial accounting and reporting frameworks used by content TOPIC. Each group or topic includes one or more representative TASKS
for-profit (public and nonpublic) and not-for-profit entities. that an nlCPA may be expected to complete in practice.
The frameworks eligible for assessment include the standards and/or regulations Tasks in the FAR section blueprint are representative. They are not intended
issued by the: to be (nor should they be viewed as) an all-inclusive list of tasks that may be
tested in the FAR section of the Exam. Lists or examples included within the text
• Financial Accounting Standards Board (FASB)
of a representative task beginning with the word “including” are not intended
• U.S. Securities and Exchange Commission (U.S. SEC) to be exhaustive. Within some representative tasks are parenthetical lists. If a
parenthetical list begins with “e.g.,” this is not intended to be an exhaustive list but
• American Institute of Certified Public Accountants (AICPA) rather examples of the types of content that could be assessed. Parenthetical lists
The assessment of financial accounting and reporting concepts will focus on that do not include “e.g.” are intended to be an exhaustive list of the content to be
an nlCPA’s role in the preparation and review of financial statements, account assessed with respect to that representative task.
balances and transactions to ensure compliance with the applicable frameworks Content allocation
described above. The assessment will incorporate: The following table summarizes the content areas and the allocation of content
• Data and technology concepts, including the verification of the completeness tested in the FAR section of the Exam:
and accuracy of source data used in the preparation of financial statements
and the use of various sources of data and information to prepare supporting Content area Allocation
schedules for account balances.
Area I Financial Reporting 30–40%
Area II Select Balance Sheet Accounts 30–40%
materials (e.g., FASB Accounting Standards Codification) to complete a range
of tasks including identifying issues, analyzing facts and determining Area III Select Transactions 25–35%
appropriate responses.
The FAR section of the Exam will also assess foundational concepts related to
the accounting requirements for state and local governments as issued by the
Governmental Accounting Standards Board (GASB).
A list of reference materials relevant to the FAR section of the Exam is included
under References at the conclusion of this introduction.
Uniform CPA Examination Blueprints: Core Examination Section – Financial Accounting and Reporting (FAR) FAR2
Financial Accounting and Reporting (continued)

Overview of content areas • Intangible assets, with a focus on finite-lived intangible assets.
Area I of the FAR section blueprint covers the preparation, review and analysis • Payables and accrued liabilities.
of financial statements (for profit and not-for-profit entities) and foundational
concepts related to the accounting requirements for state and local governments. • Long-term debt, including notes and bonds payable and debt covenant
The Area includes the following: calculations.
• General-purpose financial reporting and ratios and performance metrics • Equity transactions, specifically focusing on equity issuance, stock dividends,
applicable to for-profit entities and not-for-profit entities prepared under the stock splits and treasury stock.
FASB Accounting Standards Codification.
If significant accounting or reporting differences exist between for-profit and
• Disclosures specific to public companies including earnings per share prepared not-for-profit entities for a given group or topic, such differences are in
under the FASB Accounting Standards Codification and the interim, annual and representative not-for-profit tasks in the FAR section blueprint.
periodic filing requirements for U.S. registrants in accordance with the rules of
the U.S. SEC. Area III of the FAR section blueprint covers the financial accounting and reporting
requirements in the FASB Accounting Standards Codification that are applicable to
• Financial statements prepared under special purpose frameworks as described
select transactions for both for-profit and not-for-profit entities. The Area includes
in AU-C Section 800 of the Codification of Statements on Auditing Standards.
the following:
• State and local government concepts including measurement focus, basis
• Accounting changes and error corrections.
of accounting and determining the appropriate funds to record activities in
accordance with the GASB Codification of Governmental Accounting and • Contingencies and commitments.
Financial Reporting Standards. • Revenue recognition, specifically focusing on recalling and applying the five-step
model and accounting for contributions received by not-for-profit entities.
Area II of the FAR section blueprint covers the financial accounting and reporting
requirements in the FASB Accounting Standards Codification that are applicable • Accounting for income taxes.
to select balance sheet accounts for both for-profit and not-for-profit entities. The • Fair value measurement concepts and classification within the fair
Area includes the following: value hierarchy.
• Cash and cash equivalents. • Leases, specifically focusing on recalling and applying lessee
• Trade receivables. accounting requirements.
• Inventory. • Subsequent events.
• Property, plant and equipment. If significant accounting or reporting differences exist between for-profit and
• Investments, including financial assets at fair value, financial assets at not-for-profit entities, such differences are in representative not-for-profit tasks
amortized cost and equity method investments. in the FAR section blueprint.

Section assumptions The FAR section of the Exam assesses content at the first three skill levels of
The FAR section of the Exam includes multiple-choice questions and task-based Bloom’s taxonomy as described below:
simulations. Candidates should assume that all of the information provided in • Remembering and Understanding is tested in all three areas of the FAR
each question is material and should apply all stated assumptions. In addition, blueprint. Tasks, such as identifying transactions and financial reporting
candidates should assume that each question applies to a for-profit business requirements, require nlCPAs to demonstrate their comprehension of
entity reporting under U.S. GAAP unless otherwise stated in the fact pattern for a accounting concepts and standards.
question. For example, questions that apply to not-for-profit entities specify the
nature of these entities as “not-for-profit” or “non-governmental, not-for-profit.” • Application skills are tested in all three areas of the FAR blueprint. Tasks,
Questions that apply to state and local governments include phrases such as such as preparing journal entries and financial statements, require nlCPAs to
“local government,” “state,” “municipality” or “city.” use accounting concepts and standards to measure and recognize financial
statement amounts.
Skill allocation • Analysis skills are tested in all three areas of the FAR blueprint. Tasks, such as
The Exam applies a skill framework based on the revised Bloom’s Taxonomy reconciling account balances and detecting financial reporting discrepancies,
of Educational Objectives3. Bloom’s Taxonomy classifies a continuum of skills require nlCPAs to demonstrate a higher level of interpretation. Area II has the
depicted in the table below: highest concentration of analysis tasks.
Skill Levels The representative tasks combine both the applicable content knowledge and
the skills required in the context of the work that an nlCPA would reasonably be
The examination or assessment of problems, and use
Evaluation expected to perform.
of judgment to draw conclusions.

Analysis of separate areas in order to identify causes and find


Revised taxonomy see Anderson, L.W. (Ed.), Krathwohl, D.R. (Ed.), Airasian, P.W., Cruikshank, K.A., Mayer, R.E., Pintrich, P.R., Raths, J., & Wittrock, M.C. (2001). A taxonomy for learning, teaching, and assessing: A revision of Bloom’s Taxonomy of Educational Objectives (Complete
3
Edition). New York: Longman. For original taxonomy see Bloom, B.S. (Ed.), Engelhart, M.D., Furst, E.J., Hill, W.H., & Krathwohl, D.R. (1956). Taxonomy of educational objectives: The classification of educational goals. Handbook 1: Cognitive domain. New York: David McKay.
Financial Accounting and Reporting (FAR)

References — Financial Accounting and Reporting • Codification of Statements on Auditing Standards: AU-C Section 800, Special
The References detailed below are the sources of the subject matter eligible for Considerations – Audits of Financial Statements Prepared in Accordance
assessment in the FAR section, to the extent that the subject matter is included with Special Purpose Frameworks
in the blueprint’s content areas, groups and topics. Further, the assessment of the • AICPA Practice Aid — Accounting and Financial Reporting Guidelines
subject matter described in a representative task that identifies an organization, for Cash — and Tax — Basis Financial Statements
publication, law, regulation, standard or framework is limited to the specific
sections of the References detailed below. Similarly, subject matter identified in • State and Local Government References:
a representative task and related subject matter is eligible for assessment to the – GASB Codification of Governmental Accounting and Financial
extent it is included in the References detailed below. Reporting Standards
• FASB Accounting Standards Codification – GASB Statements
• FASB Concepts Statements • Current textbooks on accounting for business entities, not-for-profit entities,
and state and local government entities
• U.S. SEC References:
– Securities Exchange Act of 1934
– Regulation S-X of the Code of Federal Regulations (17 CFR Part 210)
– Regulation S-K of the Code of Federal Regulations (17 CFR Part 229)
Summary Blueprint
I. Financial Reporting 30–40%
II. Select Balance Sheet Accounts 30–40%
III. Select Transactions 25–35%
Evaluation –
Analysis 35–45%
topics and representative tasks for the FAR section. It is important to note that
Area I – Financial Reporting (30–40%)

Skill
Remembering
& Understanding
A. General-Purpose Financial Reporting: For-Profit Business Entities
1. Balance sheet/Statement Prepare a classified balance sheet from a trial balance and
of financial position supporting documentation.
Adjust the balance sheet to correct identified errors.
Detect, investigate and correct discrepancies while agreeing the balance

sheet amounts to supporting documentation, including the source data.
2. Income statement/Statement Prepare a single-step or multi-step income statement (e.g., operating,

of profit or loss nonoperating, discontinued operations) from a trial balance and supporting
documentation.
Adjust the income statement to correct identified errors.
Calculate transaction gains or losses recognized from monetary transactions

denominated in a foreign currency.
Detect, investigate and correct discrepancies while agreeing the income statement
amounts to supporting documentation, including the source data.
3. Statement of comprehensive Recall the purpose, objectives and structure of the statement of
income comprehensive income.
Identify items classified as other comprehensive income.
4. Statement of changes in equity Prepare a statement of changes in equity from a trial balance and
supporting documentation.
Adjust the statement of changes in equity to correct identified errors.
Detect, investigate and correct discrepancies while agreeing the statement

of changes in equity amounts to supporting documentation, including the
source data.
Area I – Financial Reporting (30–40%) (continued)

Skill
Remembering
& Understanding
A. General-Purpose Financial Reporting: For-Profit Business Entities (continued)
5. Statement of cash flows Prepare a statement of cash flow using the indirect method and required
disclosures from supporting documentation.
Adjust a statement of cash flows to correct identified errors.
Detect, investigate and correct discrepancies while agreeing the statement of

cash flows amounts to supporting documentation, including the source data.
Derive the impact of transactions on the statement of cash flows.
6. Consolidated financial statements Prepare consolidated financial statements (adjustments, and/or eliminations)
(including wholly-owned subsidiaries from supporting documentation.
and noncontrolling interests)
Adjust consolidated financial statements to correct identified errors.
Detect, investigate and correct discrepancies identified while agreeing the

consolidated financial statement amounts to supporting documentation,
including the source data.
7. Notes to financial statements Adjust the notes to the financial statements to correct identified errors
and omissions.
Compare the notes to the financial statements to the financial statements and
supporting documentation, including the source data, to identify inconsistencies
and investigate those inconsistencies.
B. General-Purpose Financial Reporting: Nongovernmental Not-for-Profit Entities
1. Statement of financial position Recall the purpose and objectives of the statement of financial position
for a nongovernmental, not-for-profit entity.

Skill
Remembering
& Understanding
B. General-Purpose Financial Reporting: Nongovernmental Not-for-Profit Entities (continued)
1. Statement of financial position Prepare a statement of financial position for a nongovernmental, not-for-profit
(continued) entity from a trial balance and supporting documentation.
Adjust the statement of financial position for a nongovernmental, not-for-profit

entity to correct identified errors.
2. Statement of activities Recall the purpose and objectives of the statement of activities for a
nongovernmental, not-for-profit entity.
Prepare a statement of activities for a nongovernmental, not-for-profit entity,

including donor restrictions and releases from donor restrictions, from a trial
balance and supporting documentation.
Adjust the statement of activities for a nongovernmental, not-for-profit entity

to correct identified errors.
Report expenses by nature and function in either the statement of activities,

the notes to the financial statements or a statement of functional expenses
for a nongovernmental, not-for-profit entity.
3. Statement of cash flows Recall the purpose and objectives of the statement of cash flows for a
nongovernmental, not-for-profit entity.
Prepare a statement of cash flows and required disclosures using the direct
method or indirect method for a nongovernmental, not-for-profit entity.
Adjust the statement of cash flows for a nongovernmental, not-for-profit entity

to correct identified errors.
4. Notes to the financial statements Adjust the notes to the financial statements to correct identified errors
and omissions.

Skill
Remembering
& Understanding
C. State and Local Government Concepts
1. Measurement focus and Recall the measurement focus and basis of accounting used by state and local
basis of accounting governments for fund and government-wide financial reporting.
2. Purpose of funds Determine the appropriate fund(s) that a state or local government should use
to record its activities.
D. Public Company Reporting Topics
Recall the purpose of forms 10-Q, 10-K and 8-K that a U.S. registrant is required
to file with the U.S. Securities and Exchange Commission under the Securities
Exchange Act of 1934.
Identify the items of Form 10-Q (Part I Items 1 through 3) and Form 10-K
(Part II Items 7, 7A and 8) filed with the U.S. Securities and Exchange Commission.
Calculate basic earnings per share and diluted earnings per share considering
the impact of stock options, preferred stock, convertible preferred stock and/or
convertible debt.
E. Special Purpose Frameworks
Recall appropriate financial statement titles to be used for the financial statements
prepared under a special purpose framework.
Perform calculations to convert cash basis or modified cash basis financial

statements to accrual basis financial statements.
Prepare financial statements using the cash basis or modified cash basis
of accounting.
Prepare financial statements using the income tax basis of accounting.

Skill
Remembering
& Understanding
F. Financial Statement Ratios and Performance Metrics
Identify the appropriate financial statement ratio or performance metric to perform

a specified type of analysis.
Calculate profitability ratios (e.g., gross profit margin, return on sales, return
on assets, return on equity).
Calculate liquidity ratios (e.g., current, quick, accounts receivable turnover,

inventory turnover, accounts payable turnover).
Calculate solvency ratios (e.g., debt-to-equity, total debt, times interest earned).
Calculate performance metrics (e.g., EBITDA, price-to-earnings, dividend payout,

asset turnover).
Calculate variances between budget and actual results.
Area II – Select Balance Sheet Accounts (30–40%)

Skill
Remembering
& Understanding
A. Cash and cash equivalents
Calculate cash and cash equivalents balances to be reported in the financial

statements.
Reconcile the cash balance per the bank statement to the general ledger.
Investigate unreconciled cash balances to determine whether an adjustment

to the general ledger is necessary.
B. Trade receivables
Calculate trade receivables and allowances (e.g., credit losses, sales returns)
and prepare journal entries.
Prepare any required journal entries to record the transfer of trade receivables
(secured borrowings, factoring, assignment, pledging).
Prepare a rollforward of the trade receivables account balance using various

sources of data and information.
Reconcile and investigate differences between the subledger and general ledger
for trade receivables to determine whether an adjustment is necessary.
C. Inventory
Calculate the carrying amount of inventory and prepare journal entries using
various costing methods.
Use the lower of cost and net realizable value or the lower of cost or market
approach to calculate the carrying amount of inventory.
Prepare a rollforward of the inventory account balance using various sources

of data and information.
for inventory to determine whether an adjustment is necessary.
Area II – Select Balance Sheet Accounts (30–40%) (continued)

Skill
Remembering
& Understanding
D. Property, plant and equipment
Calculate the gross and net property, plant and equipment balances and prepare
journal entries.
Calculate gains or losses on the disposal of long-lived assets to be recognized

in the financial statements.
Calculate impairment losses on long-lived assets to be recognized in the

Determine whether an asset qualifies to be reported as held for sale in the

Adjust the carrying amount of assets held for sale and calculate the loss to be
recognized in the financial statements.
Prepare a rollforward of the property, plant and equipment account balance

using various sources of data and information.
Reconcile and investigate differences between the subledger and general

ledger for property, plant and equipment to determine whether an adjustment
is necessary.
E. Investments
1. Financial assets at fair value Identify investments that are eligible or required to be reported at fair value in
the financial statements.
Calculate the carrying amount of investments measured at fair value

(excluding impairment).
Calculate investment income to be recognized in net income for investments

measured at fair value and prepare journal entries.
Calculate impairment losses to be recognized on applicable investments reported

at fair value in the financial statements.

Skill
Remembering
& Understanding
E. Investments (continued)
2. Financial assets at amortized cost Identify investments that are eligible to be reported at amortized cost in the
Calculate the carrying amount of investments measured at amortized cost

and prepare journal entries (excluding impairment).
Calculate impairment losses to be recognized on investments reported at

amortized cost in the financial statements.
3. Equity method investments Identify when the equity method of accounting can be applied to an investment.
Calculate the carrying amount of equity method investments and prepare journal
entries (excluding impairment).
F. Intangible assets
Identify the criteria for recognizing intangible assets in the statement of financial
position and classify intangible assets as either finite-lived or indefinite-lived.
Calculate the carrying amount of finite-lived intangible assets reported in the

financial statements (initial measurement, amortization and impairment) and
prepare journal entries.
Calculate the carrying amount of purchased software and cloud computing

arrangements reported in the financial statements (initial measurement,
amortization and impairment) and prepare journal entries.

Skill
Remembering
& Understanding
G. Payables and accrued liabilities
Recall the recognition and measurement requirements for asset retirement obligations.
Calculate the carrying amount of payables (e.g., accounts payable, dividends

payable) and accrued liabilities (e.g., accrued wages, accrued vacation, accrued
bonuses, self-insurance liabilities) and prepare journal entries.
Identify and calculate liabilities arising from exit or disposal activities

(e.g., one-time termination benefits, severance arrangements) and determine
the timing of recognition in the financial statements.
for accounts payable and accrued liabilities to determine whether an adjustment
is necessary.
H. Debt (financial liabilities)
1. Notes and bonds payable Recall the criteria to classify a change to a debt instrument as either a
modification of terms or an extinguishment of debt.
Understand when a change to the terms of a debt instrument qualifies as a

troubled debt restructuring.
Calculate the interest expense attributable to notes and bonds payable reported
in the financial statements (e.g., discounts, premiums, debt issuance costs).
Calculate the carrying amount of notes and bonds payable and prepare
journal entries.
2. Debt covenant compliance Perform debt covenant calculations as stipulated in a debt agreement to
ascertain compliance.
I. Equity
Prepare journal entries to recognize equity transactions in the financial statements

(e.g., equity issuance, stock dividends, stock splits, treasury stock, capital account
activity in pass-through entities).
Area III – Select Transactions (25–35%)

Skill
Remembering
& Understanding
A. Accounting changes and error corrections
Calculate a required adjustment to the financial statements due to an accounting

change (change in accounting principle or change in accounting estimate)
or error correction and determine whether it requires prospective or
retrospective application.
Derive the impact to the financial statements and related note disclosures
of an identified accounting change or an error correction.
B. Contingencies and commitments
Recall the recognition and disclosure criteria used to identify commitments

and contingencies.
Calculate amounts of contingencies and prepare journal entries.
Review supporting documentation to determine whether a commitment or

contingency requires recognition and/or disclosure in the financial statements.
C. Revenue recognition
Recall concepts of accounting for revenue using the five-step model.
Recall the recognition requirements associated with conditional and unconditional

promises to give (pledges) for a nongovernmental, not-for-profit entity.
Identify transfers to a nongovernmental, not-for-profit entity acting as an agent or

intermediary that are not recognized as contributions.
Determine the amount and timing of revenue to be recognized using the five-step
model and prepare journal entries.
Determine the recognition and subsequent measurement requirements for

contract costs and prepare journal entries.
Area III – Select Transactions (25–35%) (continued)

Skill
Remembering
& Understanding
C. Revenue recognition (continued)
Determine the amount and timing of revenue to be recognized by a

nongovernmental, not-for-profit entity for contributed services received
Calculate the amount to be recognized for contributions (financial assets and

nonfinancial assets) to a nongovernmental, not-for-profit entity.
D. Accounting for income taxes
Recall the accounting treatment for uncertainty in income taxes.
Recall the criteria for recognizing or adjusting a valuation allowance for

a deferred tax asset.
Calculate the income tax expense and current taxes payable/receivable.
Calculate deferred tax assets/liabilities resulting from book to tax basis

differences (e.g., allowance for credit losses, inventory costing methods,
property, plant and equipment).
Prepare journal entries to record the tax provision.
E. Fair value measurements
Identify the valuation techniques used to measure fair value.
Recall assumptions (e.g., highest and best use, market participant assumptions,
unit of account) and approaches (cost, income, market) used to measure fair value.
Use the fair value hierarchy to determine the classification of a fair value
measurement.
Area III – Select Transactions (25–35%) (continued)

Skill
Remembering
& Understanding
F. Lessee accounting
Recall the appropriate accounting treatment for residual value guarantees,

purchase options and variable lease payments included in leasing arrangements
for a lessee.
Identify the criteria for classifying a lease arrangement for a lessee.
Calculate the carrying amount of lease-related assets and liabilities and prepare
journal entries that a lessee should record.
Calculate the lease costs that a lessee should recognize in the income statement.
G. Subsequent events
Identify a subsequent event and recall its appropriate accounting treatment.
Calculate required adjustments to financial statements and/or note disclosures

based on identified subsequent events.
Derive the impact to the financial statements and required note disclosures due
to identified subsequent events.
Taxation and Regulation (REG)
Blueprint
Taxation and Regulation

The Taxation and Regulation (REG) section of the Uniform CPA Examination rather examples of the types of content that could be assessed. Parenthetical lists
(the Exam) tests the knowledge and skills that nlCPAs must demonstrate that do not include “e.g.” are intended to be an exhaustive list of the content to be
with respect to: assessed with respect to that representative task.
• U.S. ethics and professional responsibilities related to tax practice Content allocation
• U.S. business law The following table summarizes the content areas and the allocation of content
• U.S. federal tax compliance for individuals and entities with a focus on tested in the REG section of the Exam:
recurring and routine transactions
Content area Allocation
The assessment of federal tax compliance will focus on an nlCPA’s role in both the
Area I Ethics, Professional Responsibilities and Federal 10–20%
preparation and review of tax returns. The assessment will incorporate:
Tax Procedures
• Data and technology concepts including the verification of the completeness
Area II Business Law 15–25%
and accuracy of source data used to prepare returns and supporting schedules
and the consideration of the outputs of automated validation checks and Area III Federal Taxation of Property Transactions 5–15%
diagnostic tools that highlight potential errors or anomalies.
Area IV Federal Taxation of Individuals 22–32%
materials (e.g., Internal Revenue Code, Treasury Regulations) to complete a Area V Federal Taxation of Entities (including tax preparation) 23–33%
range of tasks including identifying issues, analyzing facts and determining
appropriate responses. Overview of content areas
Area I of the REG section blueprint covers the following:
A list of reference materials relevant to the REG section of the Exam is included
under References at the conclusion of this introduction. • Ethics and Responsibilities in Tax Practice — Requirements based on Treasury
Department Circular 230 and the rules and regulations for tax return preparers.
Content organization and tasks
The REG section blueprint is organized by content AREA, content GROUP and • Licensing and Disciplinary Systems — Requirements of state boards of
content TOPIC. Each topic includes one or more representative TASKS that an accountancy to obtain and maintain the CPA license.
nlCPA may be expected to complete when performing tax preparation services • Federal Tax Procedures – Understanding federal tax processes and procedures,
or other responsibilities of a CPA. including audits and appeals, appropriate disclosures, substantiation, penalties
and authoritative hierarchy.
(nor should they be viewed as) an all-inclusive list of tasks that may be tested • Legal Duties and Responsibilities – Understanding legal issues that affect the
in the REG section of the Exam. Lists or examples included within the text of CPA and their practice.
a representative task beginning with the word “including” are not intended to
be exhaustive. Within some representative tasks are parenthetical lists. If a
parenthetical list begins with “e.g.”, this is not intended to be an exhaustive list but
Uniform CPA Examination Blueprints: Core Examination Section – Taxation and Regulation (REG) REG2
Taxation and Regulation (continued)

Area II of the REG section blueprint covers several business law concepts focused • Reporting of income from pass-through entities, including the proper handling
on the legal implications of business transactions and issues as they relate to of items on an individual’s tax return.
accounting, auditing and financial reporting. The Area includes the following:
• Loss limitations, filing statuses available to a taxpayer, the role of tax credits
• Government regulation of business, specifically employment taxes, worker and safe harbor requirements for estimated taxes.
classification laws, the Bankruptcy Abuse Prevention and Consumer Protection
Act of 2005, the Foreign Corrupt Practices Act of 1977 and the Patient Area V of the REG section blueprint covers federal tax compliance related to
Protection and Affordable Care Act. routine and recurring transactions and issues for entities. The Area includes
the following:
• Areas of agency, contracts, debtor-creditor relationships and business structure.
• Required adjustments to book income to determine taxable income.
– The Uniform Commercial Code under the topics of contracts
and debtor-creditor relationships. • Computation of taxable income for C corporations, including state and local
tax issues, and allowable tax credits.
– Legal aspects of business entity selection, formation, operation
and termination. • Determination of ordinary business income (loss) and separately stated items
for S corporations and partnerships, and the impact of current year transactions
Area III of the REG section blueprint covers federal tax compliance related to
on the owner’s basis in the entity.
routine and recurring property transactions for individuals and entities. The Area
includes the following: • Classification options for limited liability companies, eligibility and election of
S corporation status and types of tax-exempt organizations.
• Basis of an asset purchased for use in a trade or business, and the related
depreciation of the asset. Section assumptions
The REG section of the Exam includes multiple-choice questions and task-based
• Basis of an asset converted from personal to business use, and the related
simulations. Candidates should assume that the information provided in each
depreciation of the asset.
question is material and should apply all stated assumptions. Candidates will
• Basis of assets held by individuals. not be tested on their knowledge of specific tax rate percentages, amounts
or limitations that are indexed to inflation. Absent any stated assumptions,
• Basis of intangible assets.
candidates should assume that transactions or events referenced in the question
• Cost recovery (depreciation and amortization) of assets held for use in a occurred in the current year and should apply the most recent provisions of
trade or business. the tax law in accordance with the timing specified in the CPA Exam Policy on
New Pronouncements.
Area IV of the REG section blueprint covers federal tax compliance related to
routine and recurring transactions and issues for individuals. The Area includes
the following:
• Inclusion and exclusion of amounts for purposes of calculating gross income,

adjusted gross income and taxable income.
Taxation and Regulation (continued)

Skill allocation References — Regulation
The Exam applies a skill framework based on the revised Bloom’s Taxonomy
of Educational Objectives4. Bloom’s Taxonomy classifies a continuum of skills The References detailed below are the sources of the subject matter eligible for
depicted in the table below: assessment in the REG section, to the extent that the subject matter is included
Skill Levels
The examination or assessment of problems, and use sections of the References detailed below. Similarly, subject matter identified in
Evaluation of judgment to draw conclusions. a representative task and related subject matter is eligible for assessment to the
Analysis of separate areas in order to identify causes and find • Revised Model Business Corporation Act
• Revised Uniform Limited Partnership Act
The use or demonstration of knowledge, concepts • Revised Uniform Partnership Act
• Uniform Accountancy Act
• Uniform Commercial Code
• Internal Revenue Code of 1986, as amended
The REG section of the Exam assesses content at the first three skill levels of • Treasury Department Circular No. 230, Regulations Governing Practice
Bloom’s Taxonomy as described below: before the Internal Revenue Service
• Remembering and Understanding is mainly concentrated in Area I and Area II. • Treasury Regulations
These two areas contain the general ethics, professional responsibilities and • Other administrative pronouncements regarding federal taxation
business law knowledge that is required for nlCPAs and they are tested at the
• Case law on federal taxation
lower end of the skill level continuum.
• Public Law 86-272
• Application and Analysis skills are primarily tested in Areas III, IV and V. These
three areas contain more of the day-to-day tasks that nlCPAs are expected to • Bankruptcy Abuse Prevention and Consumer Protection Act of 2005
perform related to the preparation and review of tax returns and therefore are • Patient Protection and Affordable Care Act
tested at the higher end of the skill level continuum.
• The Foreign Corrupt Practices Act of 1977
the skills required in the context of the work that an nlCPA would reasonably be • Uniform Division of Income for Tax Purposes Act (UDITPA)
expected to perform. • Current textbooks on business law, federal taxation, accounting and ethics
4
David McKay.
Regulation and Taxation (REG)
Summary Blueprint
I. Ethics, Professional Responsibilities and Federal 10–20%

Tax Procedures
II. Business Law 15–25%
III. Federal Taxation of Property Transactions 5–15%
IV. Federal Taxation of Individuals 22–32%
V. Federal Taxation of Entities (including tax preparation) 23–33%
Evaluation –
Analysis 25–35%
topics and representative tasks for the REG section. It is important to note that
Area I – Ethics, Professional Responsibilities

and Federal Tax Procedures (10–20%)
Skill
Remembering
& Understanding
A. Ethics and responsibilities in tax practice
1. Regulations governing practice Recall the regulations governing practice before the Internal Revenue Service.
before the Internal Revenue Service
Apply the regulations governing practice before the Internal Revenue Service
given a specific scenario.
2. Internal Revenue Code and Recall who is a tax return preparer.

Regulations related to tax
return preparers Recall situations that would result in tax return preparer penalties.
Apply potential tax return preparer penalties given a specific scenario.
B. Licensing and disciplinary systems
Understand and explain the role and authority of state boards of accountancy.
C. Federal tax procedures
1. Audits, appeals and the Explain the audit and appeals process as it relates to tax matters.
judicial process
Explain the different levels of the judicial process as they relate to tax matters.
2. Substantiation and disclosure Summarize the requirements for the appropriate disclosure of a
tax return position.
Recall requirements to report foreign bank accounts.
Identify situations in which disclosure of tax return positions is required.
Identify whether substantiation is sufficient given a specific scenario.
Area I – Ethics, Professional Responsibilities

and Federal Tax Procedures (10–20%) (continued)
Skill
Remembering
& Understanding
C. Federal tax procedures (continued)
3. Taxpayer penalties Recall situations that would result in taxpayer penalties relating to tax returns.
Identify taxpayer penalties given a specific scenario.
4. Authoritative hierarchy Recall the appropriate hierarchy of authority for tax purposes.
D. Legal duties and responsibilities
1. Common law duties and liabilities Summarize the tax return preparer’s common law duties and liabilities to clients
to clients and third parties and third parties.
Identify situations which result in violations of the tax return preparer’s common
law duties and liabilities to clients and third parties.
2. Privileged communications, Summarize the rules regarding privileged communications as they relate
confidentiality and privacy acts to tax practice.
Identify situations in which communications regarding tax practice are

considered privileged.
Area II – Business Law (15–25%)

Skill
Remembering
& Understanding
A. Agency
1. Authority of agents and principals Recall the types of agent authority.
Identify whether an agency relationship exists given a specific scenario.
2. Duties and liabilities of Explain the various duties and liabilities of agents and principals.
agents and principals
Identify the duty or liability of an agent or principal given a specific scenario.
B. Contracts
1. Formation Summarize the elements of contract formation between parties.
Identify whether a valid contract was formed given a specific scenario.
Identify different types of contracts (e.g., written, verbal, unilateral, express,

implied) given a specific scenario.
2. Performance and discharge Explain the rules related to the fulfillment of performance obligations
necessary for an executed contract.
Explain the different ways in which a contract can be discharged

(e.g. performance, agreement, and operation of the law).
Identify whether a contract has been discharged given a specific scenario.
Identify whether both parties to a contract have fulfilled their performance

obligation given a specific scenario.
3. Breach and remedies Summarize the different remedies available to a party for breach of contract.
Identify situations involving breach of contract given a specific scenario.
Identify the remedy available to a party for breach of contract given a

specific scenario.
Area II – Business Law (15–25%) (continued)

Skill
Remembering
& Understanding
C. Debtor-creditor relationships
Explain the rights, duties and liabilities of debtors, creditors and guarantors.
Explain the rights of debtors and creditors and how property is distributed
in bankruptcy proceedings.
Explain the difference between a secured and unsecured creditor and the
requirements needed to perfect a security interest.
Identify rights, duties or liabilities of debtors, creditors or guarantors given

a specific scenario.
D. Federal laws and regulations (employment tax, qualified health plans, bankruptcy, worker classifications and anti-bribery)
Summarize the federal laws and regulations for qualified health care plans,
including required business mandates and premium tax credits.
Explain the federal laws and regulations related to employment taxes from
both an employer and employee perspective.
Recall the factors used to determine classification of an employee versus

an independent contractor.
Recall the types of bankruptcy and the requirements for discharge

of indebtedness.
Summarize the federal laws and regulations prohibiting bribery of foreign

government officials, including payments made to generate preferential treatment
from a foreign government.
Identify compliance issues with various federal laws and regulations (employment
tax, qualified health plans, bankruptcy, worker classifications and anti-bribery)
Area II – Business Law (15–25%) (continued)

Skill
Remembering
& Understanding
E. Business structure
1. Selection and formation of Summarize the processes for formation and termination of various
business entity and related business entities.
operation and termination
Summarize the legal characteristics of various business entities.
2. Rights, duties, legal obligations Summarize the rights, duties, legal obligations and authority of owners
and authority of owners and and management.
management
Identify the rights, duties, legal obligations and authority of owners and
management given a specific scenario.
Area III – Federal Taxation of Property Transactions (5–15%)

Skill
Remembering
& Understanding
A. Basis of assets
Calculate the tax basis of an asset purchased for use in a trade or business.
Calculate the tax basis of an asset converted from personal to business use.
Calculate the tax basis of property received as a gift or as an inheritance

from a decedent.
Calculate the tax basis of stock acquired through a wash sale.
Calculate the basis of intangible assets, including organization costs,

start-up costs and loan costs.
B. Cost recovery (depreciation and amortization)
Calculate tax depreciation for tangible business property using MACRS,

including identification of the applicable recovery period and convention.
Determine property eligible for a Section 179 deduction.
Calculate tax amortization for intangible assets.
Review a tax depreciation and amortization schedule for the current year
and supporting documentation, including any source data used to create
the schedule, to determine the completeness and accuracy of the expense
amounts deducted for tax purposes.
Review and resolve discrepancies identified by automated diagnostic and

validation checks to ensure the completeness and accuracy of the depreciation
and amortization expense reported on a tax return based on the source data used
to prepare the return.
Area IV – Federal Taxation of Individuals (22–32%)

Skill
Remembering
& Understanding
A. Gross income (inclusions and exclusions)
Calculate the amounts that should be included in an individual’s gross income

as reported on Form 1040 – U.S. Individual Income Tax Return, including wages,
interest and dividends, guaranteed payments received from a partnership, fringe
benefits, income from a qualified retirement plan and punitive damages.
Calculate the capital gain that should be included in an individual’s gross income
as reported on Form 1040 – U.S. Individual Income Tax Return from transactions,
including gains from the sale of investments or virtual currencies, assets received
as gifts and assets received from a decedent and classify them as
long-term or short-term.
Calculate the amounts that should be excluded from an individual’s gross

income as reported on Form 1040 – U.S. Individual Income Tax Return, including
tax-exempt interest, gifts received and life insurance proceeds.
Calculate the income reported in the year of death for a decedent on Form 1040 –
U.S. Individual Income Tax Return.
Review Form 1040 – U.S. Individual Income Tax Return and supporting
documentation, including any source data used to create the return, to determine
the completeness and accuracy of the gross income reported.

validation checks to ensure the completeness and accuracy of the gross income
reported on Form 1040 – U.S. Individual Income Tax Return based on the source
data used to prepare the form.
B. Reporting of items from pass-through entities
Use information provided from disregarded and pass-through entities in which

an individual has an ownership interest to report an owner’s share of ordinary
business income (loss) and separately stated items on an individual’s tax return.
Area IV – Federal Taxation of Individuals (22–32%) (continued)

Skill
Remembering
& Understanding
C. Adjustments and deductions to arrive at adjusted gross income and taxable income
Identify adjustments allowed in the calculation of adjusted gross income given

a specific scenario, including a contribution to a qualified retirement plan,
contribution to a health savings plan and self-employment expenses.
Identify itemized deductions allowed in the calculation of taxable income given

a specific scenario, including medical expenses, qualified residence interest
expense, casualty losses, taxes and charitable contributions.
Calculate the qualifying business income (QBI) deduction for federal income
tax purposes.
the accuracy of the adjusted gross income and taxable income reported.

validation checks to ensure the completeness and accuracy of the adjusted gross
income and taxable income reported on Form 1040 – U.S. Individual Income Tax
Return based on the source data used to prepare the form.
D. Loss limitations
Calculate the net tax loss allowed on the sale of capital property, including netting
of capital gains and losses and capital loss carryforwards.
Calculate the amount of ordinary business loss allowed for an individual materially
participating in the operations of a pass-through entity with sufficient basis in
the entity.
Calculate losses disallowed for tax purposes, such as from a hobby, wash sale
or sale of a personal-use asset.
Area IV – Federal Taxation of Individuals (22–32%) (continued)

Skill
Remembering
& Understanding
D. Loss limitations (continued)
documentation, including any source data used to create the return, to
determine the accuracy of the losses reported.

validation checks to ensure the completeness and accuracy of the loss limitations
reported on Form 1040 – U.S. Individual Income Tax Return based on the source
data used to prepare the form.
E. Filing status
Recall taxpayer filing status for tax purposes.
Recall relationships meeting the definition of dependent for purposes of

determining taxpayer filing status.
Identify taxpayer filing status for tax purposes given a specific scenario.
F. Computation of tax and credits
Recall and define the difference between a refundable and nonrefundable

tax credit.
Recall and define the safe harbor requirements for individual estimated tax
payments to avoid penalties.
Calculate the tax liability based on an individual’s taxable income given a specific
scenario, including consideration of the net investment income tax.
Area V – Federal Taxation of Entities (including tax preparation) (23–33%)

Skill
Remembering
& Understanding
A. Differences between book and tax income (loss)
Identify permanent vs. temporary differences to be reported on Schedule M-3

in a given scenario.
Calculate the book/tax differences to be reported on a Schedule M-1 or M-3.
Review an entity’s adjusted book trial balance and supporting documentation

to identify and calculate possible book/tax differences.
Review a C corporation’s adjusted book trial balance and supporting

documentation, including relevant source data used to create the trial
balance, to determine the completeness and accuracy of the book/tax
differences reported on Form 1120 – U.S. Corporation Income Tax Return.
B. C corporations
1. Computations of taxable income, Calculate taxable income for a C corporation.

tax liability and allowable credits
Calculate the current-year net operating or capital loss of a C corporation,
and the limitations on use in the current year.
Calculate the credits allowable as a reduction to tax for a C corporation.
2. State and local tax issues Define the general concept and rationale of nexus with respect to state
and local taxation.
Define the general concept and rationale of apportionment and allocation

with respect to state and local taxation.
Calculate state taxable income using the applicable apportionment factors

Area V – Federal Taxation of Entities (including tax preparation) (23–33%) (continued)

Skill
Remembering
& Understanding
C. S corporations
1. Eligibility and election Recall eligible shareholders for an S corporation for tax purposes.
Recall S corporation eligibility requirements for tax purposes.
Identify situations in which S corporation status would be revoked or

terminated for tax purposes.
2. Determination of ordinary business Calculate ordinary business income (loss) and separately stated items for an
income (loss) and separately S corporation for tax purposes.
stated items
Calculate the impact of current year operations on an S corporation’s accumulated
adjustments account.
Review federal Form 1120S – U.S. Income Tax Return for an S Corporation and
supporting documentation, including any source data used to create the return,
to determine the completeness and accuracy of the classification of items as
ordinary business income (loss), separately stated or nondeductible.

validation checks to ensure the completeness and accuracy of the ordinary
business income (loss) and separately stated items reported on Form 1120S –
U.S. Income Tax Return for an S Corporation based on the source data used to
prepare the form.
3. Basis of shareholder’s interest Calculate a shareholder’s stock basis in an S corporation for tax purposes
resulting from business operations, cash contributions by the shareholder and
cash distributions to the shareholder.
Calculate changes in a shareholder’s debt basis in an S corporation resulting from

current year repayment of debt.
Area V – Federal Taxation of Entities (including tax preparation) (23–33%) (continued)

Skill
Remembering
& Understanding
D. Partnerships
1. Determination of ordinary business Calculate ordinary business income (loss) and separately stated items for
income (loss) and separately a partnership for tax purposes, including consideration of guaranteed
stated items payments disbursed.
Review federal Form 1065 – U.S. Return of Partnership Income and supporting
the completeness and accuracy of the classification of items as ordinary business
income (loss), separately stated or nondeductible.

validation checks to ensure the completeness and accuracy of ordinary business
income (loss) and separately stated items reported on Form 1065 – U.S. Return of
Partnership Income based on the source data used to prepare the form.
2. Basis of partner’s interest Calculate the partner’s basis in a partnership for tax purposes resulting from
business operations, cash contributions by a partner, cash distributions to a
partner and changes in existing partnership liabilities.
E. Limited liability companies
Recall the tax classification options for a limited liability company for
tax purposes.
F. Tax-exempt organizations
Recall the different types of tax-exempt organizations for tax purposes.
Business Analysis and
Reporting (BAR)
Blueprint
Business Analysis and Reporting

The Business Analysis and Reporting (BAR) section of the Uniform CPA A list of reference materials relevant to the BAR section of the Exam is included
Examination (the Exam) assesses the knowledge and skills nlCPAs must under References at the conclusion of this introduction.
demonstrate with respect to:
Content organization and tasks
• Financial statement and financial information analysis with a focus on an The BAR section blueprint is organized by content AREA, content GROUP and
nlCPA’s role in comparing historical results to budgets and forecasts, deriving content TOPIC. Each group or topic includes one or more representative TASKS
the impact of transactions, events (actual and proposed) and market conditions that an nlCPA may be expected to complete in practice.
on financial and nonfinancial performance measures and comparing
investment alternatives. Tasks in the BAR section blueprint are representative. They are not intended
to be (nor should they be viewed as) an all-inclusive list of tasks that may be
• Select technical accounting and reporting requirements under the Financial tested in the BAR section of the Exam. Lists or examples included within the
Accounting Standards Board (FASB) Accounting Standards Codification and text of a representative task beginning with the word “including” are not intended
the U.S. Securities and Exchange Commission (SEC) that are applicable to to be exhaustive. Within some representative tasks are parenthetical lists. If a
for-profit business entities and employee benefit plans. parenthetical list begins with “e.g.”, this is not intended to be an exhaustive list but
• Financial accounting and reporting requirements under the Governmental rather examples of the types of content that could be assessed. Parenthetical lists
Accounting Standards Board (GASB) that are applicable to state and local that do not include “e.g.” are intended to be an exhaustive list of the content to be
government entities. assessed with respect to that representative task.
The assessment will also incorporate: Content allocation

• Data and technology concepts, including the: tested in the BAR section of the Exam:
– Verification of the completeness and accuracy of source data used in
comparing historical results to budgets and forecasts and deriving the Content area Allocation
impact of transactions and events (actual and proposed).
Area I Business Analysis 40–50%
– Determination of methods to transform data to make it useful for
Area II Technical Accounting and Reporting 35–45%
decision-making.
Area III State and Local Governments 10–20%
– Determination of attribute structures, formats and sources of data needed
to prepare financial statement analysis.
Overview of content areas
– Use of outputs from data analytic techniques to explain an entity’s results
Area I of the BAR section blueprint covers historical, current and prospective
or to identify and detect discrepancies.
analysis of the financial statements. The Area includes the following:
• Applied research with a focus on reviewing and using excerpts of source • Financial statement analysis, including comparison of current period financial
materials (e.g. FASB Accounting Standards Codification, GASB Statements of statements to prior period or budget and interpretation of financial statement
Governmental Accounting Standards) to complete a range of tasks including fluctuations and ratios.
identifying issues, analyzing facts and determining appropriate responses.
Uniform CPA Examination Blueprints: Discipline Examination Section – Business Analysis and Reporting (BAR) BAR2
Business Analysis and Reporting (continued)

• Non-financial and non-GAAP measures of performance, including use of • Derivatives and hedge accounting.
the balanced scorecard approach and interpretation of non-financial and
• Leases, specifically focusing on recalling and applying lessor accounting
non-GAAP measures to assess an entity’s performance and risk profile.
requirements and analyzing the provisions of a lease agreement to determine
• Managerial and cost accounting concepts and the use of variance whether a lessee appropriately accounted for the lease.
analysis techniques.
• Public company reporting topics, specifically focusing on Regulation S-X,
• Budgeting, forecasting and projection techniques. Regulation S-K and segment reporting.
• Factors that influence an entity’s capital structure, such as leverage, • Financial statements of employee benefit plans.
cost of capital, liquidity and loan covenants.
To the extent there are accounting or reporting differences between public
• Financial valuation decision models used to compare investment alternatives. business entities and nonpublic business entities, such differences may be tested
• The Committee of Sponsoring Organizations of the Treadway Commission for the financial accounting and reporting topics in the BAR section blueprint.
(COSO) Enterprise Risk Management framework, including how it applies to
Area III of the BAR section blueprint covers GASB’s financial accounting and
environmental, social and governance (ESG) related risks.
reporting requirements for state and local governments under the GASB
• The effect of changes in economic conditions and market influences on an standards and interpretations. The Area includes the following:
entity’s business.
• Basic concepts and principles of the government-wide, governmental funds,
Area II of the BAR section blueprint covers financial accounting and reporting proprietary funds and fiduciary funds financial statements.
requirements in the FASB Accounting Standards Codification that are applicable • Preparing government-wide, governmental funds, proprietary funds and
to technical accounting and reporting topics. The Area includes the following: fiduciary funds financial statements and other components of the financial
• Indefinite-lived intangible assets, including goodwill. section of the annual comprehensive financial report.
• Internally developed software. • Deriving the government-wide financial statements and reconciliation
requirements.
• Revenue recognition, specifically focusing on the analysis and interpretation
of agreements, contracts and other supporting documentation to determine • Accounting for specific types of transactions such as net position, fund
whether revenue was appropriately recognized. balances, capital assets, long-term liabilities, interfund activity, nonexchange
revenue, expenditures and expenses and budgetary accounting within the
• Stock compensation. governmental entity financial statements.
• Research and development costs.
Section assumptions
• Business combinations. The BAR section of the Exam includes multiple-choice questions and task-based
• Consolidated financial statements, specifically focusing on topics including simulations. Candidates should assume that all of the information provided in
variable interest entities, noncontrolling interests, functional currency and each question is material and should apply all stated assumptions. In addition,
foreign currency translation adjustments. candidates should assume that each question applies to a for-profit business

entity reporting under U.S. GAAP unless otherwise stated in the fact pattern for a • Application skills are tested in all three areas of the BAR blueprint. Tasks, such
question. For example, questions that apply to the state and local governments as calculating and determining the impact of a transaction on the business,
include phrases such as “local government,” “state,” “municipality” or “city.” preparing journal entries and preparing financial statements, require nlCPAs to
use accounting and business concepts to measure an entity’s performance and
Skill allocation to measure and recognize financial statement amounts.
The Exam applies a skill framework based on the revised Bloom’s Taxonomy
of Educational Objectives.5 Bloom’s Taxonomy classifies a continuum of skills • Analysis skills are tested in Areas I and II of the BAR blueprint. Tasks, such
depicted in the table below: as interpreting results, comparing alternatives, reconciling account balances
and interpreting agreements, require nlCPAs to demonstrate a higher level of
Skill Levels interpretation. Area I has the highest concentration of analysis tasks.
The examination or assessment of problems, and use
Evaluation of judgment to draw conclusions. the skills required in the context of the work that an nlCPA would reasonably be
expected to perform.
Analysis of separate areas in order to identify causes and find References — Business Analysis and Reporting
The References detailed below are the sources of the subject matter eligible for
Application assessment in the BAR section, to the extent that the subject matter is included
or techniques.
Remembering The perception and comprehension of the significance subject matter described in a representative task that identifies an organization,
and Understanding of an area utilizing knowledge gained. publication, law, regulation, standard or framework is limited to the specific
sections of the References detailed below. Similarly, subject matter identified in
The BAR section of the Exam assesses content at the first three skill levels of a representative task and related subject matter is eligible for assessment to the
Bloom’s taxonomy as described below: extent it is included in the References detailed below.
• Remembering and Understanding is tested in all three areas of the BAR • FASB Accounting Standards Codification
blueprint. Tasks, such as identifying criteria and recalling concepts, require • U.S. SEC References:
nlCPAs to demonstrate their comprehension of accounting concepts,
frameworks and standards. Areas II and III have the highest concentration – Securities Exchange Act of 1934
of remembering and understanding tasks. – Regulation S-X of the Code of Federal Regulations (17 CFR Part 210)
– Regulation S-K of the Code of Federal Regulations (17 CFR Part 229)
5
David McKay.

• State and Local Government References: • The Committee of Sponsoring Organizations of the Treadway Commission
– GASB Codification of Governmental Accounting and Financial (COSO):
Reporting Standards – Enterprise Risk Management – Integrating with Strategy and Performance
– GASB Statements, Interpretations, Technical Bulletins and – Enterprise Risk Management – Applying Enterprise Risk Management to
Concepts Statements Environmental, Social and Governance-related risks
– National Council on Governmental Accounting (NCGA) Statements • Current textbooks on accounting for business entities, state and local
and Interpretations government entities, data analytics, economics, finance, managerial and
cost accounting
Business Analysis and Reporting (BAR)
Summary Blueprint
I. Business Analysis 40–50%
II. Technical Accounting and Reporting 35–45%
III. State and Local Governments 10–20%
Evaluation –
Analysis 30–40%
topics and representative tasks for the BAR section. It is important to note that
Area I – Business Analysis (40–50%)

Skill
Remembering
& Understanding
A. Current period/historical analysis, including the use of data
1. Financial statement analysis Determine attribute structures, format and sources of data needed to prepare
financial statement analysis.
Compare current period financial statement accounts to prior periods or budget

and explain variances.
Interpret financial statement fluctuations and ratios (e.g., profitability, liquidity,

solvency, performance).
Use outputs (e.g., reports, visualizations) from data analytic techniques to identify
patterns, trends and correlations to explain an entity’s results.
Derive the impact of transactions on the financial statements and notes to the
2. Non-financial and non-GAAP Identify relevant non-financial and non-GAAP measures used to analyze an entity’s
measures of performance performance.
Identify and apply internal and external benchmarking (e.g., competitor analysis)
techniques to measure an entity’s performance.
Use a balanced scorecard approach to measure an entity’s performance.
Interpret non-financial (e.g., customer retention rate, employee turnover, labor

productivity rate, ticket response time) and non-GAAP (e.g., EBITDA, free cash
flow, core earnings, adjusted net income for non-recurring expenses) measures
and analyze specific aspects of an entity’s performance and risk profile.
3. Managerial and cost accounting Calculate fixed, variable and mixed costs.
Describe and use the different costing methods including absorption, variable,
activity-based, process and job order costing.
Area I – Business Analysis (40–50%) (continued)

Skill
Remembering
& Understanding
A. Current period/historical analysis, including the use of data (continued)
3. Managerial and cost accounting Derive the appropriate variance analysis method to measure the key cost drivers
(continued) by analyzing business scenarios.
Interpret sales results by performing price, volume and mix analysis.
B. Prospective analysis, including the use of data
1. Budgeting, forecasting Determine methods to transform (e.g., preparing, cleaning, scrubbing) structured
and projection and unstructured data to make it useful for decision-making.
Prepare a budget using supportable assumptions.
Use forecasting and projection techniques to model financial results including

revenue growth, cost and expense characteristics and profitability.
Prepare and interpret the results of planning techniques including cost benefit
analysis, sensitivity analysis, what-if scenarios, breakeven analysis and
predictive analytics.
Analyze results of forecasts and projections using ratio analysis and explanations
of correlations to, or variations from, key financial indices.
2. Capital structure Calculate the cost of capital for a given financial scenario.
Determine the impact of changes in an entity’s capital structure on cost of capital,

loan covenants, liquidity and leverage.
Compare the strategies for financing new business initiatives and operations
within the context of an optimal capital structure.
Interpret the impact of various capital structures on financial statements and key
performance measures.

Skill
Remembering
& Understanding
B. Prospective analysis, including the use of data (continued)
3. Investment alternatives Use assumptions (e.g., highest and best use, market participant assumptions, unit
using financial valuation of account) and approaches (cost, income, market) to measure fair value.
decision models
Determine the impact of changes to assumptions used to value an asset.
Compare investment alternatives (e.g., system replacement, make, lease or buy

decisions) using financial metrics and modeling (e.g., payback period, net-present
value, economic value added, cash flow analysis, internal rate of return).
4. Risk management Recall the purpose and objectives of the COSO ERM framework.
Recall how the COSO ERM framework can be applied to identify, respond to,
and report environmental, social and governance (ESG) related risks.
Apply the COSO ERM framework to identify risk/opportunity scenarios in an entity.
Use strategies to mitigate financial risks (e.g., market, interest rate,

currency, liquidity).
Compare various strategies for managing the working capital of an entity.
Derive the impact of a proposed transaction on key performance measures

of an entity.
Interpret an entity’s strengths, weaknesses, opportunities and threats (SWOT)

analysis to assess the entity’s options to achieve its overall business strategy.
5. Economic and market Determine the effect of supply and demand and elasticity measures on a product.
influences on business
Calculate the effect of inflation on a product’s real price or an entity’s investments,
debt and future expenses.

Skill
Remembering
& Understanding
B. Prospective analysis, including the use of data (continued)
5. Economic and market influences Calculate and use ratios and measures to quantify risks associated with risks
on business (continued) of an entity (e.g., interest rates, currency exchange, prices).
Calculate the opportunity cost of a business decision.
Interpret the impact of market influences on an entity’s business strategy,

operations and risk (e.g., sourcing production inputs, innovating to develop
or diversify product offerings, seeking new markets, undertaking productivity
or cost-cutting initiatives).
Compare acquisition and divestiture opportunities based on given market analysis

and investment criteria.
Area II – Technical Accounting and Reporting (35–45%)

Skill
Remembering
& Understanding
A. Indefinite-lived intangible assets, including goodwill
Recall impairment indicators for goodwill and other indefinite-lived

intangible assets.
Calculate the carrying amount of goodwill and other indefinite-lived intangible

assets reported in the financial statements (initial measurement and impairment)
B. Internally developed software
Recall the criteria necessary to capitalize software developed for internal use
or software developed for sale in the financial statements.
Calculate capitalized software developed for internal use or software

developed for sale to be reported in the financial statements and the related
amortization expense.
C. Revenue recognition
Interpret agreements, contracts and/or other supporting documentation to

determine the amount and timing of revenue to be recognized in the financial
statements using the five-step model.
Interpret source data and outputs from data analytic techniques (e.g., reports,
visualizations) to detect, investigate and resolve potential discrepancies
(e.g., errors, outliers, unexpected contract elements) in the recognition of
revenue in the financial statements using the five-step model.
D. Stock compensation (share-based payments)
Recall concepts associated with share-based payment arrangements (e.g., grant

date, vesting conditions, inputs to valuation techniques, valuation models).
Use a given fair value measurement of a share-based payment arrangement

classified as equity to prepare journal entries to recognize compensation cost.
Area II – Technical Accounting and Reporting (35–45%) (continued)

Skill
Remembering
& Understanding
D. Stock compensation (share-based payments) (continued)
Use given fair value measurements of a share-based payment arrangement

classified as a liability to prepare journal entries to recognize compensation cost.
E. Research and development costs
Identify research and development costs and classify the costs as an expense
Calculate the research and development costs to be reported as an expense

F. Business combinations
Recall concepts associated with the accounting for business combinations

(e.g., business vs. asset acquisition, contingent consideration, measurement
period adjustments).
Prepare journal entries to record the identifiable net assets acquired in a business
combination that results in the recognition of goodwill or a bargain purchase gain.
Prepare journal entries to record the identifiable net assets acquired in a business
combination that includes a noncontrolling interest.
Calculate the consideration transferred in a business combination.
G. Consolidated financial statements
Recall basic consolidation concepts and terms (e.g., controlling interest,

noncontrolling interest, primary beneficiary, variable interest entity).

Skill
Remembering
& Understanding
G. Consolidated financial statements (continued)
Recall the basic functional currency concepts including the indicators to be

considered when determining a subsidiary’s functional currency.
Calculate foreign currency translation adjustments (local currency to functional

currency and/or functional currency to reporting currency) to prepare consolidated
Determine the appropriate presentation of foreign currency translation

adjustments in the consolidated statement of comprehensive income.
H. Derivatives and hedge accounting
Identify the characteristics of a freestanding and/or embedded derivative financial

instrument to be recognized in the financial statements.
Identify the criteria necessary to qualify for hedge accounting.
Recall the appropriate presentation of gains and losses on derivative financial

instruments (swaps, options and forwards) in the financial statements.
Use given inputs (interest rates, notional amounts, fair value measurements) to
prepare the journal entries to record the net settlements and changes in fair value
for an interest rate swap that qualifies for hedge accounting (fair value hedge,
cash flow hedge).
I. Leases
Identify the criteria for classifying a lease arrangement for a lessor.
Calculate the carrying amount of lease-related assets and liabilities and prepare
journal entries that a lessor should record.
Calculate the amount of lease income that a lessor should recognize in the
income statement.

Skill
Remembering
& Understanding
I. Leases (continued)
Prepare journal entries that the seller/lessee should record for a sale and
leaseback transaction.
Interpret agreements, contracts and/or other supporting documentation to

determine the appropriate accounting treatment of a leasing arrangement
and prepare the journal entries that the lessee should record.
J. Public company reporting topics
Recall public company reporting requirements of Regulation S-X and

Regulation S-K.
Recall the purpose, objective and key characteristics of XBRL business reporting.
Recall the criteria used to identify reportable segments.
Recall the financial statement note disclosure requirements for

reportable segments.
K. Financial statements of employee benefit plans
Identify the required financial statements for a defined benefit pension plan
and a defined contribution pension plan.
Recall the disclosure requirements for the notes to the financial statements
of a defined benefit pension plan and a defined contribution pension plan.
Prepare a statement of changes in net assets available for benefits for a

defined benefit pension plan and a defined contribution pension plan.
Prepare a statement of net assets available for benefits for a defined benefit
pension plan and a defined contribution pension plan.
Area III – State and Local Governments (10–20%)

Skill
Remembering
& Understanding
A. Format and content of the financial section of the annual comprehensive financial report
1. Government-wide financial Identify and recall basic concepts and principles associated with
statements government-wide financial statements (e.g., required activities, financial
statements, financial statement components).
Prepare the government-wide statement of net position for a state or local

government from trial balances and supporting documentation.
Prepare the government-wide statement of activities for a state or local

2. Governmental funds Identify and recall basic concepts and principles associated with governmental
financial statements fund financial statements (e.g., required funds, financial statements, financial
statement components).
Prepare the statement of revenues, expenditures and changes in fund balances

for the governmental funds of a state or local government from trial balances and
Prepare the balance sheet for the governmental funds of a state or local
3. Proprietary funds Identify and recall basic concepts and principles associated with proprietary fund
financial statements financial statements (e.g., required funds, financial statements, financial statement
components).
Prepare the statement of revenues, expenses and changes in fund net position
for the proprietary funds of a state or local government from trial balances and
Prepare the statement of net position for the proprietary funds of a state
or local government from trial balances and supporting documentation.
Prepare the statement of cash flows for the proprietary funds of a state
or local government.
Area III – State and Local Governments (10–20%) (continued)

Skill
Remembering
& Understanding
A. Format and content of the financial section of the annual comprehensive financial report (continued)
4. Fiduciary funds Identify and recall basic concepts and principles associated with fiduciary fund
financial statements financial statements (e.g., required funds, financial statements, financial statement
components).
Prepare the statement of changes in fiduciary net position for the fiduciary funds
of a state or local government from trial balances and supporting documentation.
Prepare the statement of net position for the fiduciary funds of a state or local
5. Notes to financial statements Recall the disclosure requirements for significant accounting policies,
infrastructure and capital assets and long-term liabilities in the notes to
the basic financial statements of state and local governments.
6. Management’s discussion Recall the objectives and components of management’s discussion and analysis
and analysis in the annual comprehensive financial report for state and local governments.
7. Budgetary comparison reporting Recall the objectives and components of budgetary comparison reporting in the
annual comprehensive financial report for state and local governments.
8. Required supplementary Recall the objectives and components of required supplementary information
information (RSI) other than other than management’s discussion and analysis in the annual comprehensive
management’s discussion financial report for state and local governments.
and analysis
9. Financial reporting entity, Recall the criteria for classifying an entity as a component unit of a state
including blended and discrete or local government and the financial statement presentation requirements
component units (discrete or blended).

Skill
Remembering
& Understanding
B. Deriving government-wide financial statements and reconciliation requirements
Prepare worksheets to convert the governmental fund financial statements to the

governmental activities reported in the government-wide financial statements.
Prepare the schedule to reconcile the total fund balances and the net change
in fund balances reported in the governmental fund financial statements to
the net position and change in net position reported in the government-wide
C. Typical items and specific types of transactions and events: measurement, valuation, calculation and presentation in governmental entity financial statements
1. Net position and Calculate the net position balances (unrestricted, restricted and net investment
components thereof in capital assets) for state and local governments and prepare journal entries.
2. Fund balances and Calculate the fund balances (assigned, unassigned, nonspendable, committed and
components thereof restricted) for state and local governments and prepare journal entries.
3. Capital assets and Identify capital assets reported in the government-wide financial statements
infrastructure assets of state and local governments.
Calculate the net general capital assets balance for state and local governments
and prepare journal entries (initial measurement and subsequent depreciation and
amortization).
4. General and proprietary Identify general and proprietary long-term liabilities reported in the
long-term liabilities government-wide financial statements of state and local governments.
Recall the recognition and measurement requirements for a net pension liability
for a defined benefit pension plan for state and local governments.
Recall the recognition and measurement requirements for a net other post
employment benefit (OPEB) liability for an OPEB plan for state and local
governments.

Skill
Remembering
& Understanding
C. Typical items and specific types of transactions and events: measurement, valuation, calculation and presentation in governmental entity financial statements (continued)
4. General and proprietary Calculate the total indebtedness to be reported in the government-wide
long-term liabilities (continued) financial statements of a state or local government.
Calculate the net general long-term debt balance for state and local governments
and prepare journal entries (e.g., debt issuance, interest payments, issue
premiums, issue discounts).
5. Interfund activity, Prepare eliminations of interfund activity in the government-wide financial

including transfers statements of state and local governments.
Prepare journal entries to recognize interfund activity within state and

local governments.
6. Nonexchange revenue Calculate the amount of nonexchange revenue to be recognized by state

transactions and local governments using the modified accrual basis of accounting and
prepare journal entries.
Calculate the amount of nonexchange revenue to be recognized by state

and local governments using the accrual basis of accounting and prepare
journal entries.
7. Expenditures and expenses Calculate expenditures to be recognized under the modified accrual basis of
accounting (paid from available fund financial resources) for state and local
governments and prepare journal entries.
Calculate expenses to be recognized under the accrual basis of accounting

for state and local governments and prepare journal entries.
8. Budgetary accounting Recall and explain the types of budgets used by state and local governments.
and encumbrances
Prepare journal entries to record budgets (original and final) of state and
local governments.
Prepare journal entries to record encumbrances of state and local governments.
Information Systems
and Controls (ISC)
Blueprint
Information Systems and Controls

The Information System and Controls (ISC) section of the Uniform CPA Examination Content organization and tasks
(the Exam) tests the knowledge and skills that nlCPAs must demonstrate with The ISC section blueprint is organized by content AREA, content GROUP and
respect to information systems, including processing integrity, availability, security, content TOPIC. Each topic includes one or more representative TASKS that an
confidentiality and privacy. Inherent in the analysis of controls in each of these nlCPA may be expected to complete when performing assurance or advisory
subjects is awareness of the risks that the entity is intending to mitigate through the services relative to an entity’s business processes, information systems, data
use of those controls. management and security.
The ISC section also tests the knowledge and skills that nlCPAs must demonstrate The tasks in the blueprint are representative. They are not intended to be (nor
with respect to data management, including data collection, storage and usage should they be viewed as) an all-inclusive list of tasks that may be tested in the ISC
throughout the data life cycle. section of the Exam. Lists or examples included within the text of a representative
task beginning with the word “including” are not intended to be exhaustive. Within
The ISC section of the exam focuses on information technology (IT) audit and some representative tasks are parenthetical lists. If a parenthetical list begins with
advisory, including System and Organization Controls (SOC) engagements. With “e.g.”, this is not intended to be an exhaustive list but rather examples of the types
respect to SOC engagements, the ISC section primarily focuses on: of content that could be assessed. Parenthetical lists that do not include “e.g.” are
• The use of the Description Criteria for a Description of a Service Organization’s intended to be an exhaustive list of the content to be assessed with respect to that
System and Trust Services Criteria for Security, Availability, Processing Integrity, representative task.
Confidentiality, and Privacy in planning, performing and reporting in a SOC 2®
Content allocation
engagement.
• Planning, certain procedures (excluding the testing of internal controls over tested in the ISC section of the Exam:
financial reporting) and reporting on a SOC 1® engagement.
Content area Allocation
The assessment will also incorporate applied research with a focus on reviewing
and using excerpts of source materials (e.g., standards, regulations, frameworks) Area I Information Systems and Data Management 35–45%
to complete a range of tasks including identifying issues, analyzing facts and
Area II Security, Confidentiality and Privacy 35–45%
determining appropriate responses.
Area III Considerations for System and Organization 15–25%
A list of reference materials relevant to the ISC section of the Exam is included
Controls (SOC) Engagements
under References at the conclusion of this introduction.
Uniform CPA Examination Blueprints: Discipline Examination Section – Information Systems and Controls (ISC) ISC2
Information Systems and Controls (continued)

Overview of content areas • Testing an entity’s controls over security, confidentiality and privacy.
Area I of the ISC section blueprint is focused on information systems and data
• An entity’s incident response plan.
management in a modern context, recognizing that much of it is cloud-based and
undergoing rapid innovation. The Area includes the following: Group A covers foundational knowledge of certain regulations, standards and
• IT architecture components and the use of cloud-based models for IT frameworks related to security, confidentiality and privacy at a Remembering
infrastructure, platforms and services. and Understanding level. Those regulations, standards and frameworks underpin
the higher-order skill testing in Group B – Security, Group C – Confidentiality and
• Enterprise and accounting information systems, the business processes they Privacy and Group D – Incident Response.
enable and controls over processing integrity.
While certain representative tasks in Area II relate to testing controls in a SOC 2®
• System availability and IT change management. engagement context, they are representative of similar procedures that may be
• Data collection, storage, structured query language (SQL) queries and performed in other IT audit and advisory contexts.
integration of data from different data sources.
Area III of the ISC section blueprint covers considerations for SOC engagements.
• Business process models. This area focuses on aspects that are unique considerations in SOC engagements
distinct from other types of attestation engagements. The Area includes the
While certain representative tasks in Area I relate to testing controls in a SOC 2® following:
engagement context, they are representative of similar procedures that may be
performed in other IT audit and advisory contexts. • Form, content and management assertions in SOC 1®, SOC 2® and SOC 3®
reports and the intended users of those reports.
Area II of the ISC section blueprint covers security, confidentiality and privacy. The
• Aspects of engagement planning and reporting for SOC 1® and SOC 2®
Area includes the following:
engagements.
• Select portions of specified regulations, standards and frameworks related
• Procedures related to complementary user entity controls and complementary
to information security and privacy that are considered by management in
subservice organization controls.
designing and implementing information systems and related controls.
• Procedures related to the system description criteria for SOC 1® and SOC 2®
• Types of threats and attacks (including cyber) to which an entity may
engagements.
be subject.
• Trust services criteria for SOC 2® engagements.
• Controls the entity uses to prevent, detect and respond to those threats
and attacks. Section assumptions
• Controls the entity uses to maintain the confidentiality and privacy of The ISC section of the Exam includes multiple-choice questions and task-based
information. simulations. Candidates should assume that the information provided in each
question is material and should apply all stated assumptions.

Skill allocation The representative tasks combine both the applicable content knowledge and
The Exam applies a skill framework based on the revised Bloom’s Taxonomy the skills required in the context of the work that an nlCPA would reasonably be
of Educational Objectives6. Bloom’s Taxonomy classifies a continuum of skills expected to perform.
depicted in the table below:
References — Information Systems and Controls
The subject matter covered in the ISC section is subject to rapid change. The
Skill Levels
References detailed below are the sources of the subject matter eligible for
The examination or assessment of problems, and use assessment in the ISC section, to the extent that the subject matter is included in
Evaluation of judgment to draw conclusions. the blueprint’s content areas, groups and topics. Further, the assessment of the
of separate areas in order to identify causes and find publication, law, regulation, standard or framework is limited to the specific
Analysis
evidence to support inferences. sections of the References detailed below. For example, a representative task that
refers to a Committee of Sponsoring Organizations of the Treadway Commission
The use or demonstration of knowledge, concepts (COSO) framework is limited to the COSO guides listed below.
• AICPA
and Understanding of an area utilizing knowledge gained. – 2017 Trust Services Criteria for Security, Availability, Processing
Integrity, Confidentiality, and Privacy (with Revised Points of Focus 2022)
(Trust Services Criteria)
The ISC section of the Exam assesses content at the first three skill levels of
Bloom’s Taxonomy as described below: – 2018 Description Criteria for a Description of a Service Organization’s System
in a SOC 2® (with Revised Implementation Guidance 2022)
• Remembering and Understanding skills are tested across all areas. These areas
– Description Criteria for Management’s Description of the Entity’s
contain foundational knowledge that nlCPAs are expected to possess related to
Cybersecurity Risk Management Program
standards, regulations, frameworks and procedures.
– Frequently asked questions – SOC 2® and SOC 3® examinations
• Application skills are tested across all areas. These areas contain tasks that
nlCPAs are expected to perform related to examining information systems, – Materiality considerations for attestation engagements involving aspects
data management and SOC engagements. of subject matters that cannot be quantitatively measured
– Reporting on an Examination of Controls at a Service Organization Relevant
• Analysis skills are tested in Area I and Area II. These areas contain tasks
to User Entities’ Internal Control Over Financial Reporting (SOC 1®) – Guide
that nlCPAs are expected to perform related to detecting deficiencies in the
suitability or design and deviations in the operation of controls related to
information systems.
6
David McKay.

– SOC 2® Reporting on an Examination of Controls at a Service • National Institute of Standards and Technology (NIST)
Organization Relevant to Security, Availability, Processing Integrity, – Framework for Improving Critical Infrastructure Cybersecurity (CSF) Version
Confidentiality, or Privacy 1.1, Sections 1 and 2, including the glossary definitions of terms used in
– Statements on Standards for Attestation Engagements and Interpretations those sections
• Center for Internet Security (CIS), CIS Controls; Version 8 – NIST Privacy Framework: A Tool For Improving Privacy through Enterprise
Risk Management; Version 1.0, Sections 1 and 2, including the glossary
– “Overview” and “Why is this Control critical?” sections of each control
definitions of terms used in those sections
(Control 01 to Control 18)
– Security and Privacy Controls for Information Systems and Organizations,
• The Committee of Sponsoring Organizations of the Treadway Special Publication 800-53 (SP 800-53) Revision 5, Chapters 1 and 2,
Commission (COSO) including the glossary definitions of terms used in those sections
– Blockchain and Internal Control: The COSO Perspective
• PCI Security Standards Council Payment Card Industry Data Security Standard
– Enterprise Risk Management for Cloud Computing (PCI DSS)
– Managing Cyber Risk in a Digital Age – PCI DSS v4.0 Quick Reference Guide, Importance of Protecting Payment
• Cybersecurity & Infrastructure Security Agency (CISA) Account Data with the PCI Data Security Standard and Overview of
PCI SSC Standards
– Security Tips published by the National Cyber Awareness System (NCAS),
released or revised subsequent to November 1, 2019 that are relevant to the • Regulation (EU) 2016/679 General Data Protection Regulation (GDPR)
Groups and Topics in Area I and Area II, limited to the information in the tip – Articles 4 through 34
itself, and not extending to the underlying referenced material
• Textbooks
• Health Insurance Portability and Accountability Act of 1996 (HIPAA) 45 CFR
– Accounting Information Systems
Part 164 Security and Privacy
– Data Confidentiality and Privacy
– Section 164.103 through Section 164.530 excluding Implementation
Specifications and Compliance Dates – Data Literacy
• ISACA – Data Management
– COBIT 2019 Framework: Introduction and Methodology, Chapters 1 through 5 – Incident Response and Disaster Recovery
– White papers available to the public free of charge that address subject – Information Security / Cyber Security
matters covered in the groups and topics of ISC Area I and Area II – Information Systems
– Information Technology (IT)
– IT Audit and Assurance
Information Systems and Controls (ISC)
Summary Blueprint
I. Information Systems and Data Management 35–45%
II. Security, Confidentiality and Privacy 35–45%
III. Considerations for System and Organization 15–25%

Controls (SOC) Engagements
Evaluation –
Analysis 10–20%
topics and representative tasks for the ISC section. It is important to note that
Area I – Information Systems and Data Management (35–45%)

Skill
Remembering
& Understanding
A. Information systems
1. IT infrastructure Explain the purpose and recognize examples of key components of IT architecture
(e.g., operating systems, servers, network infrastructure, end-user devices).
Explain cloud computing, including cloud computing models (infrastructure as a

service (IaaS), platform as a service (PaaS), and software as a service (SaaS))
and deployment models (e.g., public, private, hybrid).
Summarize the role and responsibilities of cloud service providers.
Explain how the COSO frameworks address cloud computing governance.
2. Enterprise and accounting Summarize enterprise resource planning (ERP) and accounting information
information systems systems, what they encompass and how they interact.
Explain how the COSO internal control framework can be used to evaluate risks
related to the use of blockchain in the context of financial reporting and to design
and implement controls to address such risks.
Determine potential changes to business processes to improve the performance

of an accounting information system (e.g., robotic process automation,
outsourcing, system changes).
Reconcile the actual sequence of steps and the information, documents, tools and
technology used in a key business process of an accounting information system
(e.g., sales, cash collections, purchasing, disbursements, human resources, payroll,
production, treasury, fixed assets, general ledger, reporting) to the documented
process (e.g., flowchart, business process diagram, narrative).
Detect deficiencies in the suitability or design and deviations in the operation

of controls related to an information system’s processing integrity in a
SOC 2® engagement using the Trust Services Criteria.
Area I – Information Systems and Data Management (35–45%) (continued)

Skill
Remembering
& Understanding
A. Information systems (continued)
3. Availability Recall the scope, purpose and key considerations for business resiliency, disaster
recovery and business continuity plans.
Explain the objectives of mirroring and replication.
Summarize steps in a business impact analysis.
Recall measures of system availability (e.g., agreed service time, downtime).
Determine the appropriateness of the organization’s data backup types

(e.g., full, incremental, differential) including recovery considerations.
Detect deficiencies in the suitability or design and deviations in the operation of

controls related to a service organization’s availability service commitments and
system requirements in a SOC 2® engagement using the Trust Services Criteria.
4. Change management Explain the purpose of change management related to internal hardware and
software applications, including the risks and the different types of documentation
used (e.g., system component inventory, baseline configuration).
Explain the different environments used (e.g., development, staging, production)

and the types of tests performed (e.g., unit, integration, system, acceptance).
Explain the approaches than can be used when converting to a new information
system (e.g., direct, parallel, pilot).
Explain patch management.
Test the design and implementation of change control policies (e.g., acceptance
criteria, test results, logging, monitoring) for IT resources (e.g., applications,
infrastructure components, configurations) in organizations, including those that
have adopted continuous integration and continuous deployment processes.
Area I – Information Systems and Data Management (35–45%) (continued)

Skill
Remembering
& Understanding
B. Data management
Identify data collection methods and techniques.
Define the various types of data storage (e.g., data warehouse, data lake, data mart)
and database schemas (e.g., star, snowflake).
Summarize the data life cycle (i.e., the span of the use of information, from
creation, through active use, storage and final disposition).
Examine a relational database’s structure to determine whether it applies data

integrity rules, uses a data dictionary, and normalizes the data.
Examine a standard SQL query (common commands, clauses, operators,

aggregate functions and string functions) to determine whether the retrieved
data set is relevant and complete.
Integrate the data available from different data sources to provide information
necessary for financial and operational analysis and decisions.
Investigate a business process model (e.g., flowchart, data flow diagram, business
process model and notation (BPMN) diagram) to identify potential improvements.
Area ll – Security, Confidentiality and Privacy (35–45%)

Skill
Remembering
& Understanding
A. Regulations, standards and frameworks
Recall the covered entities and permitted uses and disclosures of the HIPAA
Security and Privacy Rules.
Recall the scope of the GDPR and the six principles and key concepts for
personal data.
Recall the requirements of the PCI DSS.
Recall the three parts of the NIST CSF (Framework Core, Framework
Implementation Tiers, Framework Profiles).
Recall the three parts of the NIST Privacy Framework (Framework Core,
Framework Profiles, Framework Implementation Tiers).
Recall the purpose, applicability, target audience and organizational responsibilities

of NIST SP 800-53.
Recall the overview of each CIS Control.
Recall the governance system principles, governance framework principles and

the components of a governance system according to COBIT 2019.
B. Security
1. Threats and attacks Classify the different types of threat agents (e.g., internal or external, nation or
non-nation state-sponsored, adversary, threat actors, attacker or hacker).
Identify types of attacks (e.g., physical, distributed denial of service, malware,

social engineering, web application attacks, mobile device attacks).
Identify techniques used in a cyber-attack (e.g., buffer overflow, mobile code,

cross-site scripting, SQL injections, race conditions, covert channel, replay and
return-oriented attack).
Area ll – Security, Confidentiality and Privacy (35–45%) (continued)

Skill
Remembering
& Understanding
B. Security (continued)
1. Threats and attacks Explain the stages in a cyber-attack (e.g., reconnaissance, gaining access,
(continued) escalation of privileges, maintaining access, network exploitation, covering tracks).
Identify the cybersecurity risks related to using cloud environments, platforms

and services.
Identify the cybersecurity risks related to the Internet of Things (IoT).
Identify the cybersecurity risks related to mobile technologies.
Explain threat modeling and threat landscape.
Determine the specific cybersecurity threats in an organization’s connections

with customers, vendors and partner organizations.
Determine the specific cybersecurity threats to an organization’s on-premise and

cloud-based applications, networks and connected devices (e.g., mobile and
Internet of Things (IOT) devices).
2. Mitigation Identify ways to protect networks and devices used to access the network
remotely (e.g., isolation and segmentation, virtual private network (VPN),
wireless network security, endpoint security, system hardening, intrusion
prevention and detection systems).
Recall the definition and purpose of vulnerability management.
Explain the concepts of layered security and defense-in-depth.
Define the concepts of least-privilege, zero-trust, whitelisting and the

need-to-know principle.
Recall the purpose and content of a technology acceptable use policy including
considerations specific to mobile technologies and bring-your-own-device (BYOD).

Skill
Remembering
& Understanding
B. Security (continued)
2. Mitigation (continued) Explain how the COSO frameworks can be used to assess cyber risks
and controls.
Determine the common preventive, detective or corrective controls (e.g., intrusion

prevention systems, device and software hardening, log analysis, intrusion
detection systems, virus quarantining, patches) to mitigate risk of cyber-attacks
for an organization.
Determine the appropriate identification and authentication techniques

and technologies (e.g., password management, single sign-on, multi-factor
authentication, personal identification number (PIN) management, digital
signatures, smart cards, biometrics) in a specific scenario.
Determine the appropriate authorization model (e.g., discretionary, role-based,

mandatory) and the controls (e.g., access control list, account restrictions,
physical barriers) used to implement the model in a specific scenario.
3. Testing Perform procedures to obtain an understanding how the entity communicates

information to improve security knowledge and awareness and to model
appropriate security behaviors to personnel through a security awareness
training program.
Provide input into a security assessment report by documenting the issues,

findings and recommendations identified while performing tests of controls.
Perform a walkthrough of an organization’s procedures relevant to IT security

(e.g., IT risk management, human resources, training and education) and compare
the observed procedure with the documented policy requirement.

controls related to a service organization’s security service commitments and
system requirements in a SOC 2® engagement using the Trust Services Criteria.

Skill
Remembering
& Understanding
C. Confidentiality and privacy
Explain encryption fundamentals, techniques and applications.
Recall the differences between confidentiality and privacy.
Identify methods for the protection of confidential data during the design,
development, testing and implementation of applications that use confidential
data (e.g., data obfuscation, tokenization).
Explain Data Loss Prevention (DLP).
Identify financial and operational implications of a data breach.
Determine controls and data management practices to securely collect, process,

store, transmit and delete confidential data or data subject to privacy regulations.

controls related to a service organization’s confidentiality and privacy service
commitments and system requirements in a SOC 2® engagement using the
Trust Services Criteria.
Perform a walkthrough of an organization’s procedures relevant to confidentiality

and privacy (e.g., IT risk management, human resources, training and education)
and compare the observed procedure with the documented policy requirement.
D. Incident response
Recall the differences between security/cybersecurity events and incidents.
Explain the use of insurance as a mitigation strategy for a security incident

or data breach.
Summarize contents commonly included in incident response plans

(e.g., roles, responsibilities, methods, steps, timelines).
Perform procedures to test whether the entity responded to cybersecurity

incidents in accordance with the incident response plan.
Area III – Considerations for System and Organization Controls (SOC)

Engagements (15–25%)
Skill
Remembering
& Understanding
A. Considerations specific to planning and performing a SOC engagement
Explain the purpose of the Trust Services Criteria and its organization
(e.g., alignment with the COSO Internal Control – Integrated Framework,
supplemental criteria, common criteria and additional specific criteria).
Recall the types of subject matters a practitioner may be engaged to report

on using the Trust Services Criteria.
Identify management assertions specific to the different categories and types

(Type 1 and Type 2) of SOC engagements (SOC 1®, SOC 2®, SOC 3®).
Recall the intended users of SOC 1®, SOC 2® and SOC 3® reports.
Summarize the independence considerations between the service auditor,

service organization and subservice organizations.
Explain how materiality is determined and used in performing a SOC engagement

(SOC 1®, SOC 2®).
Identify the risk assessment requirements for a service organization and the
service auditor.
Summarize the criteria for a vendor to be considered a subservice organization.
Explain the considerations for deciding between, and use of, the inclusive and
carve-out method for subservice organizations and complementary subservice
organization controls (CSOCs).
Define service commitments and system requirements in a SOC 2® engagement

and how they correspond to an entity’s objectives referred to in the Trust
Services Criteria.

Engagements (15–25%) (continued)
Skill
Remembering
& Understanding
A. Considerations specific to planning and performing a SOC engagement (continued)
Recall the impact of subsequently discovered facts on the SOC engagement

(SOC 1®, SOC 2®).
Explain the purpose and common sections of a system description subject to

SOC 1® or SOC 2® engagements.
Recall the Description Criteria for Management’s Description of an Entity’s

Cybersecurity Risk Management Program.
Explain the purpose of complementary user entity controls (CUECs) identified

by service organization management in their system description.
Recall requirements about obtaining management’s written representations

in a SOC engagement (SOC 1®, SOC 2®).
Obtain an understanding of the system addressed by a SOC 2® engagement,

including the clear identification of the boundaries of the system as defined by
the service organization.
Perform procedures to obtain an understanding of how a service organization

provides its personnel and external users information on how to report failures,
incidents, concerns and other complaints related to a system subject to a
SOC 2® engagement.
Prepare a comparison of management’s system description to suitable criteria

in a SOC 1® engagement or to the description criteria in a SOC 2® engagement.
Determine the effect of subsequent events in a SOC 1® or SOC 2® engagement.

Engagements (15–25%) (continued)
Skill
Remembering
& Understanding
B. Considerations specific to reporting on a SOC engagement
Explain the effect of CUECs on the SOC report (SOC 1®, SOC 2®).
Summarize the carve-out vs. the inclusive method of reporting on CSOCs.
Explain the types of opinions and report modifications when deficiencies have
been identified.
Prepare results of testing of controls to be included in the SOC 2® report of the

test of a control, including when there was an exception identified by the test.
Determine the appropriate form and content of a report on the examination

of controls at a service organization (SOC 1®, SOC 2®).
Tax Compliance and
Planning (TCP)
Blueprint
Tax Compliance and Planning

The Tax Compliance and Planning (TCP) section of the Uniform CPA Examination Content organization and tasks
(the Exam) tests the knowledge and skills that nlCPAs must demonstrate with The TCP section blueprint is organized by content AREA, content GROUP and
respect to: content TOPIC. Each topic includes one or more representative TASKS that an
nlCPA may be expected to complete when performing tax preparation services,
• U.S. federal tax compliance for individuals and entities with a focus on
tax planning services or personal financial planning services.
nonroutine and higher complexity transactions
• U.S. federal tax planning for individuals and entities
• Personal financial planning in the TCP section of the Exam. Lists or examples included within the text of
a representative task beginning with the word “including” are not intended to
The assessment of federal tax compliance will focus on an nlCPA’s role in both be exhaustive. Within some representative tasks are parenthetical lists. If a
the preparation and review of tax returns. The assessment of federal tax planning parenthetical list begins with “e.g.”, this is not intended to be an exhaustive list
will focus on an nlCPA’s role in determining the tax implications of proposed but rather examples of the types of content that could be assessed. Parenthetical
transactions, available tax alternatives or business structures. The assessment lists that do not include “e.g.” are intended to be an exhaustive list of the content to
of personal financial planning will focus on planning strategies and opportunities be assessed with respect to that representative task.
that an nlCPA typically identifies in connection with the preparation and review of
individual tax returns. Content allocation
The assessments described above will also incorporate: tested in the TCP section of the Exam:
• Data and technology concepts including the verification of the completeness
and accuracy of source data used to prepare returns and supporting schedules. Content area Allocation
• Applied research with a focus on reviewing and using excerpts of source Area I Tax Compliance and Planning for Individuals and Personal 30–40%
materials (e.g., Internal Revenue Code, Treasury Regulations) to complete a Financial Planning
range of tasks including identifying issues, analyzing facts and determining
Area II Entity Tax Compliance 30–40%
appropriate responses.
Area III Entity Tax Planning 10–20%
A list of reference materials relevant to the TCP section of the Exam is included
under References at the conclusion of this introduction. Area IV Property Transactions (disposition of assets) 10–20%
Uniform CPA Examination Blueprints: Discipline Examination Section – Tax Compliance and Planning (TCP) TCP2
Tax Compliance and Planning (continued)

Overview of content areas Area III of the TCP section blueprint covers federal tax planning for entities. The
Area I of the TCP section blueprint is focused on individuals and covers federal Area includes the following:
tax compliance for nonroutine transactions and issues, tax planning and personal
• Formation and liquidation of various entities, including comparisons of different
financial planning. The Area includes the following:
entity types.
• Tax compliance issues related to incentive compensation, at-risk and passive
• Tax planning for C corporations, S corporations and partnerships, including the
loss limitations and gifting assets.
tax implications of a proposed transaction to both the entity and owner.
• Tax planning issues related to accelerating or deferring income and deductions
to minimize tax liability, estimated tax payments, gifting assets, changing tax Area IV of the TCP section blueprint covers federal tax compliance issues related
rates and legislation. to asset dispositions. The Area includes the following:
• Personal financial planning for individuals, including the assessment of qualified • Nontaxable dispositions of property, and the realized, recognized and deferred
retirement plans, investing, education funding and risk mitigation through the tax gains resulting from the transaction.
use of insurance. • Character of recognized gains and losses on the disposition of property used in
a trade or business, including installment sale transactions.
Area II of the TCP section blueprint covers federal tax compliance related to
nonroutine entity tax transactions and issues. The Area includes the following: • Sale of property to a related party, including nonrecognition of gain or loss.
• Utilization of net operating losses, consolidated tax returns and international
tax issues for C corporations. International tax issues will focus on general Section assumptions
concepts of income sourcing and allocation as opposed to specific foreign laws The TCP section of the Exam includes multiple-choice questions and task-based
or treaties. simulations. Candidates should assume that the information provided in each
question is material and should apply all stated assumptions. Candidates will
• Transactions between an entity and owner, specifically recognized income and
not be tested on their knowledge of specific tax rate percentages, amounts or
losses from the contribution of noncash property, liquidating and nonliquidating
limitations that are indexed to inflation. To the extent a question addresses a
distributions of noncash property and services performed by an owner.
topic that could have different tax treatments based on timing (e.g., net operating
• Impact on an owner’s basis resulting from contributions and distributions of losses), it will include a clear indication of the timing (e.g., use of real dates)
noncash property to an entity. so that the candidates can determine the appropriate portions of the Internal
Revenue Code or Treasury Regulations to apply to the question. Absent such an
• Partnership elections and the impact of ownership changes to a partnership. indication of timing or other stated assumptions, candidates should assume that
• Identifying characteristics of different types of trusts, calculating income and transactions or events referenced in the question occurred in the current year and
allocating items between income and corpus. should apply the most recent provisions of the tax law in accordance with the
timing specified in the CPA Exam Policy on New Pronouncements.
• Obtaining and maintaining tax-exempt status as well as recalling the types of
unrelated business income for a tax-exempt organization.
Tax Compliance and Planning (continued)

Skill allocation The representative tasks combine both the applicable content knowledge and
The Exam applies a skill framework based on the revised Bloom’s Taxonomy the skills required in the context of the work that an nlCPA would reasonably be
of Educational Objectives.7 Bloom’s Taxonomy classifies a continuum of skills expected to perform.
depicted in the table below:
References — Tax Compliance and Planning
The References detailed below are the sources of the subject matter eligible for
Skill Levels
assessment in the TCP section, to the extent that the subject matter is included
The examination or assessment of problems, and use in the blueprint’s content areas, groups and topics. Further, the assessment of the
Evaluation of judgment to draw conclusions. subject matter described in a representative task that identifies an organization,
of separate areas in order to identify causes and find sections of the References detailed below. Similarly, subject matter identified in
Analysis
evidence to support inferences. a representative task and related subject matter is eligible for assessment to the
Application or techniques. • Revised Model Business Corporation Act
Remembering The perception and comprehension of the significance • Revised Uniform Limited Partnership Act
• Revised Uniform Partnership Act
• Internal Revenue Code of 1986, as amended

The TCP section of the Exam assesses content at the first three skill levels of
Bloom’s Taxonomy as described below: • Treasury Regulations
• Remembering and Understanding is mainly concentrated in Area I and Area II. • Other administrative pronouncements regarding federal taxation
These two areas contain nonroutine compliance issues encountered by nlCPAs
• Case law on federal taxation
and they are tested at the lower end of the skill level continuum.
• Current textbooks on federal taxation, personal financial planning and
• Application and Analysis skills are tested across all areas. These areas
tax planning
contain day-to-day planning tasks that nlCPAs are expected to perform related
to tax and personal financial planning and the preparation and review of tax
returns and therefore are tested at the higher end of the skill level continuum.
7
David McKay.
Tax Compliance and Planning (TCP)
Summary Blueprint
I. Tax Compliance and Planning for Individuals 30–40%

and Personal Financial Planning
II. Entity Tax Compliance 30–40%
III. Entity Tax Planning 10–20%
IV. Property Transactions (disposition of assets) 10–20%
Evaluation –
Analysis 25–35%
topics and representative tasks for the TCP section. It is important to note that
Area I – Tax Compliance and Planning for Individuals and Personal Financial
Planning (30–40%)
Skill
Remembering
& Understanding
A. Individual compliance and tax planning considerations for gross income, adjusted gross income, taxable income and estimated taxes
Recall the impact of equity compensation awards on taxable income.
Recall items included in dermination and computation of Alternative Minimum

Taxable income.
Consider the impact to an individual’s taxable income for certain items of gross
income, including imputed interest on below-market rate loan and compensation
earned while employed outside the U.S.
Calculate the tax on a child’s investment and other unearned income.
Consider the effect of changing tax rates and legislation on the timing of income
and expense items for planning purposes given a specific scenario.
Identify projected tax savings through utilization of flexible spending accounts

(FSAs) and qualified health savings accounts (HSAs) for planning purposes given
a specific scenario.
Consider the impact of using either itemized deductions or the standard deduction
for planning purposes given a specific scenario.
Calculate estimated tax payments required for an individual to avoid

underpayment penalties given a specific planning scenario.
Calculate the potential tax savings when donating noncash property to a

charitable organization given a specific planning scenario, including identification
of the property to be donated to minimize the individual’s current-year tax liability.
Review an individual’s projected income and expenses prior to year end to

determine the tax implications, and provide options to minimize tax liability
given a specific planning scenario.
Planning (30–40%) (continued)
Skill
Remembering
& Understanding
B. Compliance for passive activity and at-risk loss limitations (excluding tax credit implications)
Calculate the at-risk loss limitation for an activity in which an individual materially
participates, including losses from pass-through entities and losses from real
estate rental activities with active participation.
Calculate the passive activity loss limitations given a specific scenario, including
the netting of passive activity gains and losses.
Calculate utilization of suspended losses on the disposition of a passive activity

for tax purposes.
Review an individual’s basis schedules and supporting documentation for a

pass-through entity, including any source data used to create the schedules,
to confirm the correct allocation of a loss between the amounts suspended
for at-risk limitations, suspended for passive activity rules, and allowed for
tax purposes.
C. Gift taxation compliance and planning
Recall allowable gift tax deductions and exclusions for federal gift tax purposes.
Explain the unified transfer tax system and how the annual exclusion, marital
deduction and the unified credit impact the planning for gifts and gift taxation.
Calculate the amount of taxable gifts for federal gift tax purposes.
Identify the potential tax savings from gifting ownership of noncash property to
an individual given a specific planning scenario, including identification of the
property to be gifted to minimize the donor’s future estate.
Planning (30–40%) (continued)
Skill
Remembering
& Understanding
D. Personal financial planning for individuals
Demonstrate an understanding of the advantages and disadvantages of different

qualified retirement plans, including traditional IRAs, Roth IRAs, 401(k)s, annuities,
and employer-sponsored plans.
Demonstrate an understanding of the risks associated with different investment

options, including equity securities, corporate bonds and municipal bonds.
Demonstrate an understanding of planning for funding post-secondary education,

including qualified tuition programs, student loans, grants and scholarships.
Explain how insurance is used in planning to mitigate risk, including life insurance,
long-term care insurance and umbrella policies.
Demonstrate an understanding of the implications of legal ownership of an asset

and beneficiary designations on an estate and its beneficiaries.
Prepare a schedule to be used in the decision-making process to select a

retirement plan from different options given a specific planning scenario,
identifying the related advantages and disadvantages.
Calculate the return on investment (ROI) for different investment options,

net of the tax impact, given a specific planning scenario.
Area II – Entity Tax Compliance (30–40%)

Skill
Remembering
& Understanding
A. C corporations
1. Net operating and capital Recall the limitations on the use of net operating losses when there is an
loss utilization ownership change.
Calculate the amount of a C corporation’s net operating loss for a given year
and the related carryforward or carryback.
Calculate the amount of a C corporation’s capital loss utilized in the current year
and the related carryforward or carryback.
2. Transactions between a Calculate a shareholder’s tax realized and recognized gain (loss) on the
shareholder and a C corporation contribution of noncash property to a C corporation, and the C corporation’s
(contributions to and distributions basis in the property contributed.
from a corporation and loans)
Calculate the tax realized and recognized gain (loss) for both a C corporation
and shareholders on a nonliquidating distribution of noncash property, and the
shareholders’ basis in the property received.
Calculate the tax realized and recognized gain (loss) for both a C corporation
and shareholders on a liquidating distribution, and the shareholders’ basis in the
property received.
Calculate the amount and treatment of the cash distributions to shareholders in

excess of a C corporation’s current and accumulated earnings and profits (E & P).
Review loan documents and supporting documentation to determine the tax

implications of a loan between a shareholder and C corporation, including
imputed interest.
3. Consolidated tax returns Recall the requirements for filing a consolidated federal Form 1120 – U.S.
Corporation Income Tax Return.
Calculate taxable income for a consolidated federal Form 1120 – U.S. Corporation
Income Tax Return, including elimination of intercompany transactions.
Area II – Entity Tax Compliance (30–40%) (continued)

Skill
Remembering
& Understanding
A. C corporations (continued)
4. International tax issues Explain the sourcing of income for a U.S. corporation with foreign operations.
Explain the sourcing of income for a foreign corporation with U.S. operations,
including consideration of federal tax withholding requirements.
Explain the concept of a controlled foreign corporation (CFC) and the impact
on a U.S. corporation’s taxable income.
Explain the concept of permanent establishment for a corporation and the

activities that would create it.
Explain the difference between a foreign branch and foreign subsidiary with
respect to federal income taxation to a U.S. corporation.
Explain the requirements related to Interest Charge Domestic International

Sales Corporation (IC-DISC), foreign derived intangible income (FDII), base erosion
and anti-abuse (BEAT) and global intangible low-taxed income (GILTI).
Calculate U.S. and foreign source income given a specific scenario.
B. S corporations
1. Basis of shareholder’s interest Calculate the impact on a shareholder’s stock basis in an S corporation for
tax purposes resulting from contributions of noncash property, including an
S corporation’s assumption of debt on the contributed property.
Calculate the impact on a shareholder’s stock basis in an S corporation for

tax purposes resulting from nonliquidating distributions of noncash property.
Calculate the impact on a shareholder’s debt basis in an S corporation for tax

purposes resulting from loans made by a shareholder to an S corporation.
Review a shareholder’s stock and debt basis schedules in an S corporation for tax
purposes and supporting documentation, including any source data used to create
the schedule, to determine the accuracy of transactions reflected.

Skill
Remembering
& Understanding
B. S corporations (continued)
2. Transactions between a Calculate a shareholder’s tax realized and recognized gain (loss) on the
shareholder and an S corporation contribution of noncash property to an S corporation, and the S corporation’s basis
(contributions to and distributions in the property contributed.
from a corporation)
Calculate the tax realized and recognized gain (loss) for both an S corporation
and shareholders on a nonliquidating distribution of noncash property, and the
shareholders’ basis in the property received.
Calculate the tax realized and recognized gain (loss) for both an S corporation and
shareholders on a liquidating distribution, and the shareholders’ basis in
the property received.
Calculate the allocation of S corporation income (loss) after the sale of a

shareholder’s ownership interest in the S corporation for tax purposes.
C. Partnerships
1. Basis of partner’s interest Calculate the impact on a partner’s basis in a partnership for tax purposes
resulting from contributions of noncash property, including a partnership’s
assumption of debt on the contributed property.
Calculate the impact on a partner’s basis in a partnership for tax purposes

resulting from nonliquidating distributions of noncash property.
Calculate the impact on a partner’s basis in a partnership for tax purposes

resulting from recourse and nonrecourse partnership debt incurred during
the current year, including loans made by a partner to a partnership.
Review a partner’s basis schedule in a partnership for tax purposes and

supporting documentation, including any source data used to create the schedule,
to determine the accuracy of transactions reflected.
2. Partnership and partner elections Recall partner elections applicable to a partnership for tax purposes (e.g.,
partnership tax year, adjustment to basis of property).

Skill
Remembering
& Understanding
C. Partnerships (continued)
3. Transactions between a partner Calculate the tax implications of certain transactions between a partner
and a partnership (services and partnership (e.g., services performed by a partner) for tax purposes.
performed by a partner and
contributions to and distributions Calculate a partner’s tax realized and recognized gain (loss) on the contribution of
from a partnership) noncash property to a partnership, and the partnership’s basis in the
property contributed.
Calculate the tax realized and recognized gain (loss) for both a partnership and
partners on a nonliquidating distribution of noncash property, and the partner’s
basis in the property received.
Calculate the tax realized and recognized gain (loss) for both a partnership
and partners on a liquidating distribution, and the partner’s basis in the
property received.
4. Ownership changes Calculate the allocation of partnership income (loss) after the sale of a
partner’s share in a partnership for tax purposes.
Calculate the revised basis of partnership assets due to a transfer of a partnership

interest for tax purposes.

Skill
Remembering
& Understanding
D. Trusts
1. Types of trusts Recall and explain the characteristics of various types of trusts, including
simple trusts, complex trusts and grantor trusts.
Recall and explain a trust as a pass-through entity and the roles of grantor,
trustee, and beneficiaries and the concept of corpus.
Recall and explain the characteristics of revocable trusts.
2. Income and deductions Identify the allocation of items between income and corpus in a given scenario.
Calculate a trust’s accounting income, distributable net income and taxable

income, including the income distribution deduction.
E. Tax-exempt organizations
1. Obtaining and maintaining Recall the requirements to qualify as an IRC Section 501(c)(3)
tax-exempt status tax-exempt organization.
Recall the events that would cause an entity to lose its tax-exempt status.
2. Unrelated business income Recall the different types of unrelated business income for tax-exempt
organizations for tax purposes.
Area III – Entity Tax Planning (10–20%)

Skill
Remembering
& Understanding
A. Formation and liquidation of business entities
Prepare a schedule that is used as an input to an entity selection decision that

calculates the tax implications of noncash property transactions for multiple
entity types.
Identify the type of business entity that is best described by a given set of
legal characteristics.
Derive the tax implications of entity selection and formation decisions across
multiple entity types and compare the results.
Derive the tax implications of entity liquidation decisions across multiple entity
types and compare the results.
B. Tax planning for C corporations
Calculate the potential tax savings from utilization of net operating and capital
loss carryovers.
Identify opportunities to optimize state and local income tax rules in tax planning
for business expansion given a specific scenario, including apportionment of
income and location of business.
Calculate the effect of changing tax rates and legislation on the timing of
income and expense items for tax planning purposes given a specific scenario.
Calculate estimated tax payments for a C corporation in order to avoid

underpayment penalties given a specific planning scenario.
Derive the tax implications to a shareholder and C corporation for a proposed

transaction after formation of the corporation, including noncash property
contributions and noncash property distributions.
Area III – Entity Tax Planning (10–20%) (continued)

Skill
Remembering
& Understanding
C. Tax planning for S corporations
Calculate the projected amount subject to built-in gains for a proposed disposition
of an asset in order to minimize the built-in gains tax due.
Identify the implications of terminating an S corporation election given a specific

planning scenario.
Derive the tax implications to a shareholder and S corporation for a proposed

transaction after formation of the corporation, including noncash property
contributions and distributions, and loans and repayment of loans from and
to a shareholder.
Derive the tax implications of a contemplated election to treat distributions to

shareholders as being made from an S corporation’s accumulated earning and
profits (AEP) and not from the accumulated adjustments account (AAA).
D. Tax planning for partnerships
Calculate the tax implications to a partner for the contribution to a partnership

of noncash property that has appreciated or depreciated in value.
Calculate the tax implications of various types of payments to a partner, including

guaranteed payments and a nonliquidating distribution.
Derive the tax implications to a partner and partnership for a proposed transaction,
including a contribution of noncash property, a nonliquidating distribution of
noncash property or the sale of a partnership interest.
Area IV – Property Transactions (disposition of assets) (10–20%)

Skill
Remembering
& Understanding
A. Nontaxable disposition of assets
Calculate the realized gain, recognized gain and deferred gain on like-kind property
exchange and involuntary conversion transactions for tax purposes and the basis
of the asset received as a result of the transactions.
Review asset sale and exchange transactions, and relevant supporting

documentation, to determine whether they are taxable or nontaxable.
B. Amount and character of gains and losses on asset disposition and netting process
Identify the character of the gain and loss recognized by a taxpayer on the
disposal of an asset given a specific scenario.
Calculate the Section 1231 capital gain and Section 1231 ordinary loss recognized
for tax purposes on the disposition of an asset used in a trade or business.
Calculate the Section 1245 and Section 1250 depreciation recapture recognized
for tax purposes on the disposition of an asset used in a trade or business.
Calculate the unrecaptured Section 1250 gain recognized for tax purposes on
disposition of an asset used in a trade or business.
Calculate the loss allowed on the disposition of Section 1244 small business stock
for tax purposes.
Area IV – Property Transactions (disposition of assets) (10–20%) (continued)

Skill
Remembering
& Understanding
B. Amount and character of gains and losses on asset disposition and netting process (continued)
Calculate the amount of gain recognized on an installment sale.
Review a schedule of asset dispositions for the current year and supporting
documentation, including any source data used, to determine the completeness
and accuracy of the amount and the character of the gain or loss recognized for
tax purposes.

validation checks to ensure the completeness and accuracy of the amount
and character of a gain or loss reported on a tax return based on the source
data used to prepare the return.
C. Related party transactions, including imputed interest
Recall related parties for tax purposes.
Calculate the direct and indirect ownership percentages of corporation

stock or partnership interests to determine whether there are related parties
for tax purposes.
Calculate a taxpayer’s gain or loss on a subsequent disposition of an asset to

an unrelated third party that was previously purchased from a related party.
Calculate the amount and treatment of imputed interest on related party

transactions for tax purposes.
Examinations Team
100 Princeton South, Suite 200
Ewing, NJ 08628
888.777.7077 | aicpa.org
© 2023 American Institute of Certifi ed Public Accountants. All rights reserved. AICPA and American Institute of CPAs are trademarks of the American Institute of Certifi ed
Public Accountants and are registered in the United States, the European Union and other countries. The Globe Design is a trademark owned by the Association of
International Certifi ed Professional Accountants and licensed to the AICPA. The Uniform CPA Examination is a registered trademark of the American Institute of Certifi ed
Public Accountants and is registered in the United States. 2208-555781
Appendix B
B. Board of Examiners
• Audrey Katcher (chair) • Joyce Joseph
• Doug Behn • Nicola Neilon
• Barry Berkowitz (past chair) • Joshua W. Partlow
• Noel S. Bowers • Randy Penfield
• Allan Cohen • Nadia A. Rogers
• Hannah Crabtree • Katrina L. Salazar
• Audra Dixon • Michelle Schumacher
• Wendy Garvin • David Vaudt
• Steve Grice • Denny Way
Maintaining the Relevance of the Uniform CPA Examination® – B1

Appendix C
C. Exposure Draft Respondents
Firms Universities
• Grant Thornton • The accounting faculty at Mississippi College
• HeinfeldMeech Individuals
• PwC • Brock Bennett
• RSM • Renee Flasher
State Boards and State Societies • Richard Gottfried
• National Association of State Boards • Erica Green
of Accountancy • Ara Grigorian
• New York State Board for Public Accountancy • Yvonne L. Huertas
• North Carolina State Board of CPA Examiners • Karina Kasztelnik
• North Dakota Board of Accountancy • Lawrence A. Kropp
• California Society of CPAs (CalCPA) • Dongsheng Li
• Florida Institute of CPAs (FICPA) • Jeffrey McGown
• Indiana CPA Society (INCPAS) • Erin Moore
• Kansas Society of CPAs • Ricky (Alan) Perry
• Massachusetts Society of CPAs (MassCPAs) • Simon Petravick
• Missouri State Society of CPAs (MOCPA) • Miranda Spencer-Mckinnon
• Pennsylvania Institute of CPAs (PICPA) • Cindy Vance
Regulators • Thomas Weirich
• U.S. Government Accountability Office (GAO) • Perry Wisinger
Government • Mayer Yudkowsky
• Tennessee Department of Audit

• Virginia Auditor of Public Accounts
• Office of the Washington State Auditor
Organizations
• AICPA PFP Executive and PFS Credential
Committees
• Association of Government Accountants
• Becker Professional Education
• The Institute of Internal Auditors
• National Association of State Auditors,
Comptrollers and Treasurers
Maintaining the Relevance of the Uniform CPA Examination® – C1

© 2023 American Institute of Certified Public Accountants. All rights reserved. AICPA and American Institute of CPAs are trademarks
of the American Institute of Certified Public Accountants and are registered in the United States, the European Union and other
countries. The Globe Design is a trademark owned by the Association of International Certified Professional Accountants and licensed
to the AICPA. The Uniform CPA Examination is a registered trademark of the American Institute of Certified Public Accountants and is
registered in the United States. 2208-555141

Practice Analysis Final Report 2023

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Maintaining the

Relevance of the Uniform

Aligning the Exam with the

Approved by the Board of Examiners

4 Final Exam Design

5 Key Tentative Dates

7 Exposure Draft Comment Responses

Maintaining the Relevance of the Uniform CPA Examination® – 1

Maintaining the Relevance of the Uniform CPA Examination® – 2

Maintaining the Relevance of the Uniform CPA Examination® – 3

Section Section time Multiple-choice Tasked-based

AUD – Core 4 hours 78 7

FAR – Core 4 hours 50 7

REG – Core 4 hours 72 8

BAR – Discipline 4 hours 50 7

ISC – Discipline 4 hours 82 6

TCP – Discipline 4 hours 68 7

Section Multiple-choice questions (MCQs) Tasked-based simulations (TBSs)

AUD – Core 50% 50%

FAR – Core 50% 50%

REG – Core 50% 50%

BAR – Discipline 50% 50%

ISC – Discipline 60% 40%

TCP – Discipline 50% 50%

Maintaining the Relevance of the Uniform CPA Examination® – 4

Maintaining the Relevance of the Uniform CPA Examination® – 5

2024 Test Administration Schedule/Score Release Timeline*

24Q1 Jan. 10–March 26 May 14–June 4 Jan. 10–Feb. 6 March 28–April 16

24Q2 April 1–June 25 Aug. 1 April 20–May 19 June 20

24Q3 July1–Sept. 25 Nov. 1 July 1–31 Sept. 3

24Q4 Oct. 1–Dec. 26 Early February 2025 Oct. 1–31 Dec. 3

* All dates are subject to change.

It is anticipated that testing will commence on Credit Extension

Maintaining the Relevance of the Uniform CPA Examination® – 6

Maintaining the Relevance of the Uniform CPA Examination® – 7

Maintaining the Relevance of the Uniform CPA Examination® – 8

Maintaining the Relevance of the Uniform CPA Examination® – 9

Maintaining the Relevance of the Uniform CPA Examination® – 10

Remembering and understanding representative tasks:

• E xplain the purpose of change management

Maintaining the Relevance of the Uniform CPA Examination® – 11

Maintaining the Relevance of the Uniform CPA Examination® – 12

• Evaluation skills should be assessed throughout

The examination or assessment of problems,

The examination and study of the interrelationships

The use or demonstration of knowledge, concepts

Remembering The perception and comprehension of the significance

Maintaining the Relevance of the Uniform CPA Examination® – 13

The section skill weights are developed using a Data analytics

Maintaining the Relevance of the Uniform CPA Examination® – 14

Maintaining the Relevance of the Uniform CPA Examination® – 15

Maintaining the Relevance of the Uniform CPA Examination® – 16

Commenters indicated the significance of federal

Maintaining the Relevance of the Uniform CPA Examination® – 17

Maintaining the Relevance of the Uniform CPA Examination® – 18

Uniform CPA Examination ®

Effective date: January 2024

Uniform CPA Examination Blueprints 1

Uniform CPA Examination Blueprints

REG – Core 4 hours 72 8

BAR – Discipline 4 hours 50 7

ISC – Discipline 4 hours 82 6

TCP – Discipline 4 hours 68 7

• E xplain the purpose of change management

• Evaluation skills should be assessed throughout